Chart of the Day - Wednesday, July 16th, 2020

Today’s Chart of the Day was shared in a research note by Frank Cappelleri, of Instinet (@FrankCappelleri). It's a ratio chart of the S&P 500 vs. the Nasdaq 100 over the past 15 months. There's been a shift in index leadership recently, with the S&P 500 outperforming the Nasdaq for five consecutive days now. The S&P has gained 2.12% in that time, while the Nasdaq has slipped 0.94%. In the note, Frank explains, "The recent NDX underperformance vs. the SPX has become noticeable on the relative chart.  While we've seen pockets of SPX strength vs. the NDX before, no effort has been strong enough to push momentum back to overbought levels in over a year. Will this time prove to be any different?" A more pronounced change in leadership wouldn't necessarily be bearish for the broader market. If anything, this type of rotation could be viewed as healthy and bullish for stocks in the long-run. In the words of "The Godfather of Technical Analysis," Ralph Acampora - "Rotation is the lifeblood of Bull Markets."