Just keeping an eye on the FANG & FANMAG’s. We are seeing signs of a potential retracement. There is nothing to indicate any major downside at this stage. One of the biggest threats to the market is retail investors have turned to passive products such as ETF’s. The main problem with this type of passive melt-up in markets, is people go to sleep and feel that they cannot go wrong. The problems will become evident when there is a sudden need to off-load these types of products. Will there be someone there to take the other side? That remains to be seen. We have not seen passive investments at these levels ever before.
“Bulls don’t die of old age, they die of fright.”
My FANG composite on the left is running rich of the Nasdaq index. Should expect a retracememnt. This would be more healthy for the market in the longer term.
On the right are the FANMAG’s which are flat at best.
NDX daily. You can see the Nasdaq VIX at the bottom of the chart is nowhere near the red danger line at 22. This uptrend has not been in danger for the whole year.
NDX weekly MACD is crossed up but could see a consolidation. Certainly a full bullish look at this time.