Tackle Today: Special NASDAQ Rebalancing Announcement
July 11, 2023
Equal Weight Leading the Charge
Traders,
The price action has been very interesting…and very different to start the week with non-Mag 7 stocks leading the charge. The announcement of the NASDAQ 100 rebalancing likely has something to do with that. The Nasdaq 100 will have a special rebalance before the market open on Monday 24th to “address overconcentration in the index by redistributing the weights.” That means a little less Mag 7 (Apple, Microsoft, Tesla, Nvidia, Amazon, Google, Meta) and more of everything else in the index as the index attempts to reduce the what has become a startling concentration in just a few stocks in the index.
Will this be token trim of the Mag 7 or something more substantial. With these stocks representing over 50% of the entire index that is a significant question which we will not know the answer to until after the close on Friday when the index announces the specific numbers.
It will be an interesting announcement after the close on Friday and certainly helps put some context to the price action to start the week with equal weight indices being the leader…for a change.
Chart of the Day: NASDAQ Equal Weighted ETF (QQQE)
Typically a very low volume ETF, volume exploded yesterday on the NASDAQ equal weighted ETF after the NASDAQ rebalancing announcement.
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