Is Round 2 of Tech Stocks Bear Market Underway?
Chris Kimble | Dec 20, 2022 17:47
The past five days have seen another strong wave of selling across tech and growth stocks.
Even more alarming is that tech stocks continue to underperform the broader market. And, as I have said many times, tech stocks have been a market leader for two decades -- so it goes without saying that investors should follow tech stocks’ performance as a bull/bear indicator.
In short, bulls want tech stocks to begin outperforming. Sadly, that is not the case yet.
Today’s chart is a monthly chart of the performance ratio of the NASDAQ Composite to the S&P 500 Index.
As you can see, it double-topped before heading sharply lower. This marked round 1 of the tech bear market.
Currently, this important ratio is looking to break below important support (prior resistance). Closing the month below this support would be bearish and likely trigger round 2 of the tech bear market. Stay tuned.
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