Good markets tend to have good leadership. That leadership spills over to other stocks and sectors and helps to produce sustained uptrends.
The key leadership in this market since the bottom in 2009 has been what is known as the FANG stocks. The five core names are Facebook (FB) , Apple (AAPL) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) .
This names have become so popular that it was inevitable that someone create a FANG ETF. The BMO REX MicroSectors FANG Index 3x Leveraged ETN trades with the symbol (FNGU) . There is an inverse vehicle as well that trades with the symbol (FNGD) .
Lets take a look at the chart of these ten stock in the form of FNGU.
As you can see it is not a very attractive setup at this time. There is no reason to believe that this group is going to lead the market right now. New leadership may emerge in difference sectors but the FANG names are in poor shape and it is hard to be overly optimistic about the market until there is a recovery to at least the 60 level.
All ten of the stocks in this ETF may have great fundamentals and a bright future but they are no longer leading this market and that is a cause for longer term concern.