Insights into the Public’s Obsession with Big-Cap Technology Shares
This measure has “officially surpassed the dot.com mania in 2000”
by Bob Stokes
Updated: July 23, 2020
Investors just can't get enough of the big technology names.
Back on June 7, the Wall Street Journal said:
Investors' Love of Tech Drives Booming Market Rally
Big and small investors are snapping up tech stocks
Our July 2 Elliott Wave Financial Forecast provided its own perspective with this chart and commentary:
Last month's issue [of the Financial Forecast] discussed the sentiment surrounding technology issues and its striking similarity to the sector's prominence in 2000. We also noted that the sector only becomes a public obsession at the most important market peaks. This chart shows that the preference for big-cap technology shares relative to the broad market has officially surpassed the dot.com mania in 2000. On July 1, the NASDAQ 100/S&P 500 ratio carried to a new all-time high.
That enthusiasm for the big names in the technology sector has persisted.
Here's a July 20 Bloomberg news item:
Nasdaq Momentum Is Hottest in 20 Years...
The Nasdaq 100 rose almost 3% [on July 20], its best day versus the S&P 500 since mid-April.
This obsession with big technology companies may continue for a time. Yet, anyone with just a cursory knowledge of financial history knows that such momentum does not last indefinitely.
Our analysts believe that the Elliott wave model can help you to prepare for the inevitable change.
As the Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, by Frost & Prechter, notes:
It is a thrilling experience to pinpoint a turn, and the Wave Principle is the only approach that can occasionally provide the opportunity to do so.
The ability to identify such junctures is remarkable enough, but the Wave Principle is the only method of analysis that also provides guidelines for forecasting.
Let our Elliott wave experts guide you, risk-free for 30 days.
Follow the link below to get started.
Buy, Sell, or Hold?
This is the question that active financial market participants face every trading day.
No investor wants to “miss out.” Yet, there’s also risk.
EWI's publications aim to help you assess and manage risk.
Right now, our analysts see opportunities -- but also extreme financial danger for investors positioned on the wrong side of trends.
Get their insights, without any obligation for 30 days.
Look below to learn how to get started with your risk-free trial.
Heavy buying of U.S. stocks by this group of investors has usually served as an “excellent indicator.” A historical chart provides a case in point. Get the insights you need to know – and learn why these insights are relevant now.
In early May, Jeffrey Kennedy showed a chart of NIO and said the stock was in the early stages of a powerful third wave: See for yourself what unfolded next.
EMLC is a fairly exotic market instrument reflecting the values of… other fairly exotic market instruments. It's an ETF that tracks bonds issued by emerging market governments. Can a market like that reflect accurate Elliott wave patterns? Watch our Interest Rates Pro Service editor explain.