A Repeat Of The 2000 Dot.com Highs In Play?

by 

Since the 2000 tech bubble and crash, tech stocks have regained their leadership form. Especially large-cap tech stocks.

Headlines have varied in focus from the “4 horseman” to “FANG” and “FANGE”, but one thing remains: Large-cap tech stocks have been the bull market leader.

So what about when large-cap tech lags the market? Not so good.

In today’s chart, we look at a “monthly” chart of the performance ratio of the Nasdaq 100 Index to the Nasdaq Composite. It’s basically a look at how large-cap tech stocks perform against the broader tech stocks world.

We are primarily funded by readers. Please subscribe and donate to support us!

As you can see, this ratio peaked out in 2000, bottomed in 2002, and has been in an up-trend ever since. That up-trend has been formed with higher lows, creating a trend line that has yet to be broken.

Are Tech Stocks About To Head Lower?

Last summer, large-cap tech’s out-performance pushed this ratio back to its 2000 high at (1) before turning lower. That turn lower has turned into several months of under-performance and has the ratio testing its bullish trend line support at (2).

How large-cap tech stocks fare here will be important, as solid trend support is at hand!!!  As a market leader, a breakdown in large-cap tech stocks would be very bearish for bulls. Stay tuned!

Views:

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.