NASDAQ Continues to Outperform S&P

Lately I've been writing about how the NASDAQ has been much stronger than the Dow and S&P and today's chart is a great example of that. You'll notice that the NASDAQ made a new high for the month today but not the S&P and Dow.

If you look at the ratio line which compares the NASDAQ to the S&P, you'll see that it has broken out and appears to be very strong.

Am I bullish on stocks? Well I don't like what I am seeing with some of the financial stocks which have not participated in this rally. If you look at the chart below you will notice a "potential" head and shoulders pattern which can turn the markets lower if the neckline is broken.

So what it comes down to is this. Tech stocks are strong but financials are weak. This last push up in the NASDAQ was not confirmed by the Dow and S&P. If the market rolls over and the neckline is broken in the S&P, I may look to play this market from the short side. We'll see what happens.