The Tech Wreck Continues

Remember when JC was a permabull?

It wasn't that I was a permabull. It was just that High Beta stocks kept outperforming Low Volatility stocks.

Those are the types of environments where you want to be buying stocks very aggressively.

And so we did.

But have you noticed how it's harder now to find stocks that are going up?

Have you counted the number of stocks that are making new highs?

It's not many.

And it's even worse in the Nasdaq, which is loaded up with Technology companies.

Look at Tech relative to the S&P500, going out this week at the lowest levels since early January:

If this market loses Tech, look out below.

As a reminder, the Technology sector represents approximately 30% of the S&P500 and 50% of the Nasdaq100.

Outside of Real Estate, Technology is the sector that had the most amount of stocks hit new 1-month lows this week.

Meanwhile, the Small-cap Technology Index just had its lowest weekly close since early January.

Here is the Small-cap Tech Index relative to the Russell2000 breaking down to the lowest levels since May of last year:

Underperforming the Small-cap Russell2000 Index is really difficult to do these days. But somehow Technology has found a way.

You see, when you go back and study every bull market throughout history, Technology was a leader in pretty much every single one.

So last year when Technology was a leader, outperforming, and trending higher, it was a lot easier to stay aggressive and spend our time looking for stocks to buy.

It was a raging bull market. What else would we do?

But this market isn't that.

You won't see it in the headlines. Nvidia is changing the world or whatever.

But when you dig in and actually count, you'll notice that Technology is dragging the rest of the market down, particularly at the individual stock level.

It's more noticable in the Nasdaq, of course, and less so in the NYSE.

But even on the NYSE, it's nowhere near the market we had in the 4th quarter.

And that's fine. It doesn't have to be.

As investors, it's up to us to adapt to the changing markets.

Yesterday was our LIVE Conference Call for Premium Members of ASC. The video from the presentation and slides to download can be found here.

This was a really important Conference Call.

We addressed some questions about the direction of markets, how interest rates are impacting the prices of stocks, and what the market would have to do to start to see breadth improvement again.

In the meantime, I laid out a few shorts we're putting on, and a few stocks we want to be buying too.

It's that type of market.

This isn't November. We don't have to pretend that it is.

In case you missed my LIVE Technical Analysis Bootcamp this week, you can still catch the recording here and download all the slides.

Anyone who joins our Bootcamp gets complete access to our LIVE Conference Call from yesterday, including all of the trade ideas with entry and exits.

Access your Technical Analysis Bootcamp here.

Let me know what you think!

JC