Technology Trepidation:

Unless one was hiding under a rock since the start of 2021, they are well aware of the tech travails. Depending upon one’s bias, a picture can be painted in two different ways (of course, PRICE is oblivious and omnipotent). If you are bullish you declare tech is at the cellar, and the only possible way it can go from here is higher. If you are a bear, you say even though technology, as measured by the XLK is down just 9% from most recent 52 week highs, it is still higher by 1.2% YTD, and therefore it could still potentially see a precipitous decline from here. The ratio chart for the XLK against the S&P 500 shows a firm, yet nascent, downtrend in place. It will most likely linger on for some time, and an analogy of a dead cat bounce could be used with a tennis ball. Drop it from above your head and each successive bounce off the floor will be lower than the previous one. The subsequent rallies could be furious in nature, but they should be used to pare back exposure.

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