Is This A Historic Breakout In Technology?

JC Parets
March 3, 2019

One of the most valuable parts of my entire process is going through my workbook of Monthly Charts (only) at the end of each month. It's easy to get lost in the day-to-day noise, but this exercise forces us to identify the direction of the primary trend.

During my review, there are always a few of them that stand out. Today I want to point out what’s happening in Americas largest sector. This is a chart of the Technology Index Fund $XLK successfully retesting those March 2000 highs and trying to rip higher:

The question coming into 2019 was whether this was an epic failed breakout in Tech last year, or just a successful retest of the March 2000 highs. If it's the latter, then we're talking about a historic upside resolution after 18 years of nothing. The weight of the evidence suggests to me that's exactly what is happening here.

So the way I see it, if this is the start of a new leg higher in Tech, stocks are in for an environment of rising prices. If we're above 66 in $XLK, it's hard for me to make a very bearish case for equities. Bears, come talk to me if this breakout fails. I don't think the probabilities are on your side. We want to be buyers.

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JC

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