Mega Cap ETF vs Equal Weighted ETF.....huge divergence today.

This a chart comparing apples to oranges, essentially. One is MGK, a megacap ETF and the other is an equal weighted ETF based on the entire S&P500. The Nasdaq is getting bitchslapped today and this is the reason - it's very top heavy because of the organizational weighting of the index itself. I'm not entirely sure what this has in store but it's worth watching as if it continues it has huge ramifications. Not necessarily bad, mind you, because I believe the mega caps are TOO fat and have to show some love to the little guys too. People moving out of the megacaps may imply a higher degree of confidence in the smaller guys, which is a good thing.

As you can see, divergences like this don't happen often. They usually move together, just in varying degrees. They have became completely inversely correlated today and it may be a sign of a strengthening or weakening of the trend, depending on how it plays out going forward.

הערה:

Notice the flip since I mentioned this on Jan 4th? That's why divergences are important.