The huge technology outage and the tariff proposal on chips...have made this very expensive stock market more vulnerable over the past week.
Some Cracks are Showing Up in the Small Cap Rally
Jan 3, 2024
We have another chart this morning which shows that a key leadership group is showing signs that it is rolling over. So, if it sees much more weakness over the coming days and weeks, it will raise a big warning flag.
We’re sorry, these big-cap tech names are just too heavily weighted in the S&P 500 and NDX 100…for them not to have a significant effect on the rest of the market to the downside…just like they did to the upside from October of 2022 to this summer.
If the tech stocks see a sustainable decline due to the new-news out of the Biden Administration, investors will likely start "rotating" towards cash.
The Russell 2000 is getting quite overbought, so investors need to be careful about chasing these names over the near-term.