Any predictions for the market in 2016?

Weekly Update

January 8, 2016 Update


Look at the QQQ

After a disappointing 2015 for investors, we begin the year looking at our focus Nasdaq 100 (QQQ) index. Monday’s plunge in stocks to welcome 2016 gapped below the index’s support level, shown below as the blue bar between 4500 and 4600. The index had failed repeatedly to forge ahead to new highs in November and December (the purple bar across the top Chart 1). This failure occurred despite extraordinary strength in some of the index’s main components – e.g. Amazon (AMZN), Google/Alphabet (GOOG and GOOGL), and Facebook (FB). These three stocks (actually four since Google/Alphabet is represented twice in the index) together comprise about 20% of the Nasdaq 100, almost twice the weight of Apple (AAPL). (It wasn’t long ago that Apple was routinely above 20% weight in the QQQ). (more…)