If Not Tech, Then What?
Meanwhile, Tech looks even worse relative to Energy stocks.
Remember, Energy was one of the bigger laggards this year, after being the initial leadership group off the 2020 lows.
Here is Tech now making new multi-month lows relative to Energy stocks:
Keep in mind, Technology represents almost 30% of the S&P500. So if Tech is struggling, S&Ps are going to have a hard time going higher.
And it's not just Tech, but Large-cap Growth in general. Names like Tesla, Google, Meta and Amazon are NOT even Technology stocks. Those are Communications and Discretionary names.
So all together, they represent a big portion of Large-cap Growth.
Look at Energy breaking out relative to the Large-cap Growth Index, as momentum towards Energy has diverged positively.
Is it over for Tech?
I doubt it.
But for now, the weight of the evidence continues to point to other areas being the better bet.
With the S&P500 running into resistance relative to the CRB Index, is it time for Commodities to resume their leadership?
That's the bet we're making.
But it's not just Large-cap U.S. Energy stocks.
There's a lot more to the Commodities complex.
I really enjoyed this interview with Legend Mark Fisher. He inspired a lot of the work you see me do here every day.
He talks a lot about Commodities in this episode.
Check it out and let me know what you think!
JC