🚀 The Great Divergence: Why Your Stocks Are Flat While QQQ Hits Highs

The Nasdaq 100 (QQQ) just hit fresh record highs.

And yet... most portfolios aren’t celebrating.

📉 Growth names are fading after earnings.

📉 Small caps are sluggish.

📉 Even winners like $AMD$ and $TSLA$ have pulled back despite the index surge.

Sound familiar? You’re not alone — and this disconnect between index strength and stock-level weakness is exactly what I’ve been digging into.👇

📊 The Illusion of Strength: Why QQQ Looks Strong But You Feel Weak

Let’s start with the basics. Indexes like QQQ and SPY are cap-weighted, meaning a handful of mega-caps drive most of the gains.

Right now, $NVDA, $MSFT$, $AAPL$, $AMZN$ and $META$ account for over 45% of QQQ’s movement.

So when NVDA rallies 4%, the index pops — even if 70% of its components are flat or red.

📉 Advance-decline ratios (A/D) show this divergence clearly:

On recent “up” days, more S&P 500 stocks declined than advanced

Russell 2000 (IWM) is lagging badly — up just 1.7% YTD vs QQQ’s +24%

It’s a market of optical strength — powered by AI hype and index concentration.

☀️ Summer Sizzle or Fade? What History Tells Us

Seasonality might also be catching up with us.

📆 Historically, August and September are among the weakest months for equities.

Even in strong years, the post-earnings lull + thin liquidity often lead to -5% to -10% pullbacks.

Example:

In 2020, QQQ dropped 11% in Sept after a red-hot summer

In 2023, SPY dropped 7% between August and October

We’re seeing similar setups this year:

Macro catalysts (Fed, inflation, earnings) are behind us

Volatility is cheap (VIX < 14), but creeping higher

The put/call ratio is climbing, suggesting hedging activity is rising

So, is this the start of a healthy late-summer reset — or just noise?

🛡️ How I’m Playing the Divergence: Defensive Rotation or Tactical Hedge?

Here’s what I’m doing now — not panicking, but positioning.

🔄 Rotating into defensives: I’ve trimmed some large-cap tech and added exposure to XLU (utilities) and XLV (healthcare) — sectors that tend to hold up during August volatility.

💸 Hedging with SQQQ: I bought a small position in SQQQ (3x inverse QQQ) as a short-term buffer in case we see a 5–7% tech pullback.

🧊 Holding cash: Raised cash from recent earnings trims (e.g., $AAPL$ post-run) to stay flexible for dips. I’m watching support zones in $SMCI, $TSLA, and $PLTR for reentry.

📉 VIXY starter: I also added a small VIXY hedge. With VIX still below 15, risk/reward seems skewed to volatility returning in late August/September.

This isn’t about being bearish — it’s about adjusting positioning as leadership narrows and breadth weakens.

💬 Your Turn: What’s Your Late Summer Trading Strategy?

So now I’m curious…

🔍 Are you rotating or retreating?

📈 Staying long mega-cap tech, or hedging with inverse ETFs like $SQQQ$ or $PSQ$?

📊 Are you still buying dips — or watching from the sidelines until breadth improves?

Markets look strong on the surface — but underneath, things feel tired.

💬 Drop your playbook — are you betting on a catch-up… or preparing for a cooldown?

> Disclaimer: This is not financial advice. For informational and educational purposes only.

@TigerStars  @Tiger_comments  @Daily_Discussion  @TigerEvents  @TigerWire