Chart of the Day: Major Market Trends

JC Parets
October 14, 2022

There are a lot of trends in markets that are worth paying attention to.

Remember, asset prices trend. They're not random.

We have the data.

So one major trend we want to make sure we're not ignoring is in Energy stocks relative to Technology.

Look at the ratio between them making new multi-year highs, yet the S&P500 weighting in energy is still less than 5% of the entire index. But Technology is still almost 25% of the index.

Is that weighting sustainable?

I don't think so.

We've been betting on the opposite, and it's been working.

Also worth pointing out is the weighting in the Nasdaq100 Index. Remember Energy has 0.00% exposure in that Index while Technology is basically half the entire index.

And that Nasdaq Weighting doesn't even include Google, Facebook or Amazon, which are all in other sectors and carry a 0% weighting in Technology.

Google and Facebook are in the Communications Sector and Amazon is Consumer Discretionary.

So even without these 3 monster stocks, Tech is still half the Nasdaq and a quarter of the S&P500.

Another interesting chart I wanted to show is the Market Cap of Tesla vs Exxon Mobil.

How soon before $XOM becomes a larger company again?

These are just a few things worth watching as we make our way through the final quarter of the year.

Asset prices are trending.

Are you taking note?

Or are you ignoring these major market changes?

Let us know how you're positioning yourself here.

We love to hear from you.

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- JC

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