A sell-off in top holding Apple (NasdaqGS: AAPL) pulled down the Nasdaq-100 PowerShares QQQ (NasdaqGM: QQQ) on Wednesday, one day after the popular ETF notched its highest price level since 2000.
QQQ has been outperforming the S&P 500 for nearly two months but now the Nasdaq-100 ETF is starting to lag the market in what could be an important emerging trend.
“This morning’s down open on the Nasdaq-100 has printed an island reversal on the chart, far from bullish bearing in mind that the index made a new decade high yesterday. This area has been leading strongly on a relative basis since late July but this fresh weakness raises a red flag,” said Investors Intelligence technical analyst Tarquin Coe.
“The Powershares QQQ ETF also shows a bearish momentum divergence with yesterday’s high and today’s slide. With the relative uptrend off the July low now broken, the weakness is not going to be short-lived,” he wrote in a newsletter Wednesday.
QQQ was in the red Wednesday while the Dow and S&P 500 both traded higher.