Investing Trend

Is Trend about to Change?

 

 

This chart looks at the Nasdaq Composite Index/S&P 500 ratio since 1997. It peaked in 2000 and fell like a rock, as tech stocks fell much harder than the broad market after the Dot.com highs.

Since the ratio double-bottomed in 2002-2003, it has created higher lows and higher highs, reflecting strength from tech.

Some weakness in the ratio is taking place after it hit the top of its long-term rising channel as well as the 2000 highs a couple of months ago.

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The trend remains up, which is bullish for tech.

If the ratio would break support at (1), it would send a negative message from the Tech sector! Keep a close eye on what this ratio does over the next couple of months, as the markets about to enter the “Sell In May and go away” time frame.

 

 

Originally Posted by Kimble Charting