Relative Weakness in QQQ Signals Caution, Not Panic

 Above is a daily chart of QQQ with its 50-day exponential moving average, and in the lower pane I’m looking at a ratio line of QQQ versus SPY, also with a 50-day EMA applied to that ratio. This combination gives me a much clearer picture of what’s really going on beneath the surface. On the price chart alone, QQQ looks fine. It’s clearly trading above its 50-day EMA, which by itself would suggest the trend is still intact. However, when I shift my focus to the ratio line, a different story starts to emerge.

The QQQ/SPY ratio is not above its 50-day EMA. That’s a clear sign of relative weakness. In plain terms, even though QQQ is holding up on an absolute basis, it’s underperforming the S&P 500. This tells me that money is rotating elsewhere and that Nasdaq stocks are not leading the market right now. As a relative strength trader, this is information I take very seriously because leadership matters. Markets tend to follow the strongest areas, and right now the Nasdaq is not wearing that crown.

That said, the appearance of relative weakness does not automatically mean I need to short the market. This is an important distinction. Relative weakness is a warning, not a trigger. At this point, I view it as a yellow light. It’s telling me to be cautious, tighten risk, and pay closer attention to key levels. As long as price continues to hold support, buyers are still in control enough to keep things stable.

What would change my stance is a clear break of support. If QQQ breaks below this week’s low of 614.56, that would be a strong signal that sellers are starting to overwhelm buyers. At that point, the combination of relative weakness and a loss of price support would suggest that lower prices are likely in the days ahead.

So for now, I’m not aggressively bearish, but I am on alert. Relative weakness has shown up, and I respect it. If price confirms it by breaking support, I’ll adjust quickly and expect downside follow through.

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Relative Strength Signals a Uranium Rally

 Uranium stocks displayed notable relative strength early in the day, and that immediately caught my attention. Above is a 5-minute chart of URA, with the SPY shown in the lower pane for comparison. Right from the start, the divergence between the two told an important story.

If you focus on points A and B, you can see that the SPY was trading significantly lower at point B than it was at point A, a clear sign of broader market weakness. URA, on the other hand, behaved very differently. Instead of following the market lower, it held firm and actually made a higher low at point B. That’s relative strength in its purest form, and it was an early signal that the uranium group was under accumulation and could be setting up for a rally.

What made this signal even more compelling was the broader context. If you’ve been following my earlier posts from today, you’ll notice that we saw this exact same relative strength pattern show up in the rare earth stocks and even in some of the drone related names. When multiple, unrelated groups of stocks begin to display the same type of behavior at the same time, it adds credibility to the signal. It tells me this isn’t just a one off move in a single ETF, but a broader shift in where buyers are focusing their attention.

Getting back to the uranium stocks, once URA pushed through its intraday highs, the move really started to gain traction. The ETF continued to rally for several hours, confirming the early relative strength we saw during the market’s weaker moments. Individual names within the group followed suit. Stocks like UEC, UUUU, URNM, and NNE all showed similar patterns and went on to post solid intraday gains.

This kind of coordinated strength across an entire group is something I always pay close attention to. It often marks the early stages of a potential trend rather than just a short lived bounce. Now the key question is whether we see follow through. I’ll be watching closely to see if this strength carries into tomorrow’s session.

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How Relative Strength in RCAT Signaled Today’s Move Higher

 

RCAT showed notable strength today, and I want to walk through some of the key indications that told me this stock was setting up for a higher move. Above is a 5-minute chart of RCAT, with the SPY shown in the lower pane for comparison. Right from the start, the relative strength stood out.

From points A to B on the chart, the SPY continued to push to new lows, clearly signaling weakness in the broader market. RCAT, however, refused to follow the market lower and instead put in a higher low. This is a textbook example of relative strength. The pattern is always the same, when a stock won’t go down while the overall market is under pressure it’s a strong indication that buyers are stepping in and taking control. That divergence immediately put RCAT on my radar.

As the session progressed, RCAT began to tighten up and eventually pushed through resistance. Once that resistance level was broken, the stock continued to move higher and finished the day closing at its high. That type of close is meaningful because it shows there was no late day profit taking. Buyers stayed in control right into the close, reinforcing the strength we saw earlier in the day.

Shifting to the chart on the right, which is a 60-minute chart of RCAT, there’s another important technical detail worth noting. I’m using a simple moving average that has done a good job supporting many of the recent lows over the past couple of weeks. Specifically, this is a 20-bar moving average of the low. Today, RCAT pulled back and tested this average, and once again it acted as support.

In my opinion, as long as RCAT continues to hold above this moving average, the trend remains intact. When you combine that trend support with the relative strength we saw versus the SPY, it paints a constructive picture. Now the focus shifts to seeing whether this strength can carry over into tomorrow’s session.

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TLRY Prints Its Highest Close in 12 Days — A Subtle Shift in Momentum

 It was another quiet day for cannabis stocks overall, but I wanted to provide a quick update on TLRY because there were a few subtle but important developments worth noting. Above is a 10-minute chart of TLRY, with the SPY shown in the lower pane for comparison. Even on a relatively dull day for the group, TLRY managed to flash some early signs of relative strength.

If you look closely, you’ll notice that the SPY went on to make a lower low during the session, which is a clear indication of broader market weakness. TLRY, however, did not follow the market down. Instead, it managed to hold up and put in a higher low. When a stock diverges from the market like this, especially on a quiet day, it often suggests that buyers are starting to step in beneath the surface. My interpretation is that some accumulation took place today, even if it wasn’t immediately obvious from the volume.

Based on that relative strength, I added to my long position above the $10 level late in the session expecting some follow through to the upside. While that follow through didn’t materialize by the close, TLRY finishing the day at 9.90 doesn’t concern me. Pullbacks and pauses are normal, especially when a stock is in the early stages of trying to turn higher.

Shifting to the daily chart on the right, there’s another small but encouraging detail. Today’s close was the highest close TLRY has posted over the past 12 trading days. That may not sound dramatic, but it’s a positive sign that momentum is slowly starting to turn back up after a period of consolidation. These subtle changes are often the first clues before a more meaningful move develops.

Looking ahead, the next key level I’m watching is 10.10, which marks the high from last week’s earnings day announcement. If TLRY can push through that level, I think there’s a good chance we begin to see this stock work its way higher in the sessions ahead.

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How Relative Strength in CRML Foreshadowed a Powerful Intraday Breakout

 Today we saw some impressive strength in the rare earth stocks led by CRML, which gave us very early indications that this name was setting up for a higher move. Above on the left is a 5-minute chart of CRML with volume, and below that is the SPY for comparison. Right away, the relative strength stood out.

From points A to B on the chart, the SPY continued to make new lows, which is a clear sign of market weakness. However, CRML told a very different story. Instead of following the market lower, CRML put in a much higher low at point B. That divergence immediately caught my attention because it signals that buyers are stepping in despite broader market pressure. When a stock refuses to go down while the market is making new lows, it’s often a sign that institutions are quietly accumulating shares.

Another important clue was volume. If you compare today’s volume around 10:30 ET to yesterday’s volume, the difference is obvious. Volume was notably heavier today, which helped confirm the relative strength we were seeing on the price chart. Elevated volume during a higher low adds conviction and increases the odds that a meaningful move is developing rather than just a short lived bounce.

Once CRML broke above resistance at 15.20, which was the high of day at the time, the move really accelerated. The stock continued to climb steadily and eventually reached a high of 19.05 several hours later. This kind of follow through after a resistance break is exactly what you want to see when relative strength is present.

Looking at the daily chart on the right, CRML is now approaching a small gap from October 20th that comes in around 19.58. Daily volume today was heavy as well, further reinforcing the strength of this move. This is just another great example of viewing the market through the lens of relative strength. CRML is definitely a stock worth keeping on your radar in the days and weeks ahead.

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