I’d want to see QQQ advancing alongside semiconductors, profitable software, financials and small caps, rather than the index being carried by a few high-beta AI names. More stocks moving above their 200-day averages would strengthen the case.
I’d also watch the quality of the rally. If companies with strong earnings, improving margins and positive free cash flow outperform those dependent on future contracts or external financing, that would look much healthier than another speculative surge.
The strongest signal would therefore be: stable yields + broader participation + earnings-backed gains. If the rally requires rapidly falling yields to continue, I would be less convinced that risk appetite has genuinely strengthened.
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