Week 15 Technology Trending and Performance

Technology has been the leader so far this year with some stocks returning massive gains. So, it is critical to keep track of technology to see whether it brings the rest of the markets up or the rest of the markets brings technology down to earth. I am not taking sides because price will tell me.

Summary

It has been one of the best years for technology so far. Price is showing some weakness but that could be transitory. Or it could be the start of some genuine weakness in the sector. The SMH trending is probably the best indicator of that. It has been a leader for the gains in the year so far and could signal best what is to come next. (I am currently short the QQQ).

Trending Heat Map (ETFs)

The picture looks very good and there has actually been improvement in the trending for several instruments. Very interesting that the QQQ has the best trending along-with IGV. We should note that 11 out of the 18 above have their price below their 10-day moving average. It could be the beginning of some weakness, or it could be nothing. I will be alert. (I am currently short the QQQ).

Trending Heat Map (Stocks)

Again, 11 out of the 18 I track above have their price below their 10-day moving average. Interestingly, Tesla looks the weakest. The strongest are Apple and Meta.

Performance (ETFs)

Crypto BITQ has been the best for this year so far. Given how the crypto space has been languishing for so long, there may not have been much focus or interest in this area. Certainly, we don’t hear about BITQ on TV. A space to watch for sure.

We can see that April has been down for most technology so far. Interestingly, the month over month is up, down, up and down (so far) and so one would think volatility must be high. But the volatility is the lowest it has been over more than a year at around 17.

Performance (Stocks)

The performance of the individual stocks is somewhat of a replica of the ETFs other than the numbers themselves. One may look at the year-to-date numbers and say these returns are not sustainable going forward with a recession and potential credit crunch looming.

That is my thinking as well. If I am told I have to predict I would predict a fall. But I do not trade based on predictions. I trade based on price movement. Maybe that is what the price movement of April so far is telling us.

Note that I do not trade individual stocks. I track the big ones just to get a good pulse of how they are performing as they are usually the leaders for either direction. Most of them will report earnings in the next few weeks and that will drive sentiment and price.