Markets are closed today for Presidents Day, so I thought today would be a great day to cover something I often do when I’m checking the markets, but haven’t talked about much before.
When I open my charts in the morning, one of the first things I look at is how Nasdaq futures (/NQ) are performing relative to S&P 500 futures (/ES).
This simple comparison helps me see where the strength is — whether big tech is leading or if the broader market is in control.
Why Compare /NQ vs. /ES?
The Nasdaq is heavy on tech stocks like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). Meanwhile, the S&P 500 includes a mix of industries — tech, financials, healthcare, consumer goods, and more.
By comparing the two, I get a quick read on market sentiment.
If the Nasdaq is outperforming the S&P, it usually means traders are willing to take on more risk and pile into tech stocks.
If the S&P is leading, money is flowing more evenly across sectors, which can indicate a more cautious or diversified market.
How I Check It
The easiest way to compare /NQ vs. /ES is to put both on a chart and track their relative performance. Here’s how:
- Look at a side-by-side chart – I pull up /NQ and /ES separately and check which one is gaining more percentage-wise on the day.
- Use a ratio chart – Some platforms allow you to divide /NQ by /ES to create a line chart showing their relative strength. If the line is rising, tech stocks are leading; if it’s falling, the broader market is stronger.
- Compare key moving averages – I also check whether /NQ and /ES are trading above or below important moving averages, like the 50-day or 200-day. This helps me see where momentum is building.
What It Tells Me
- If /NQ is leading → Tech stocks are in favor, and traders are taking on more risk. This often happens in strong bull markets.
- If /ES is leading → Money is spreading across different sectors, and the market may be in a more balanced phase.
- If both are struggling → The market could be pulling back, and I’ll dig deeper into what’s causing the weakness.
This isn’t a trading signal by itself, but it’s a useful piece of the puzzle that helps me decide where to focus my attention on any given day.
Hope you find this helpful! If you’ve never compared /NQ vs. /ES before, give it a try—it’s an easy way to gauge market strength at a glance.
Stay sharp,
—Geof Smith
P.S. President Trump is going “all-in” on US producers pumping oil here at home… And whether it pays off or not, here’s how I’m taking advantage of it.
