We saw NASDAQ reach new highs last week. This is not surprising given the recent parabolic moves in names like Amazon (10% of the QQQ) that has also made Bezos the richest man on earth.

While QQQ has reached new highs, the Semiconductor index (SOX) shows relative weakness. The SOX index is down approximately 5% over the past month clearly showing the China Trade War fear. The ratio between the two indexes has been falling rather violently over the past weeks and we are currently trading close to lows for the ratio since 2017.

This doesn’t mean the market is about to fall instantly, but could be a little Achilles heel for the market.

Last time the ratio fell this much was back in August 2015 and was followed by steep losses for the overall market.

NASDAQ (CCMP Index) making new highs, but could be developing a rising wedge.

Amazon is almost 11% of QQQs. There is only one word describing this move: parabolic.

The SOX/NASDAQ ratio has fallen violently over past weeks. Last time we saw a similar drop in the ratio was back in August 2015.

SPX fell dramatically during late summer of 2015.

Source: charts by Bloomberg