The major U.S. equity indexes ended mixed last week. The Dow was up 0.3% while the S&P 500 lost 0.3% and the Nasdaq dropped 1.6% on the week. Friday brought about an abrupt change in market dynamics, as market-leading stocks such as Amazon, Facebook, and Apple sold off dramatically. The recent outperformance of technology company stocks is an example of a herd mentality with investors driving stocks higher until an event triggers a sudden reversal. Many high-performing companies in other sectors remain undervalued as investors focused on Nasdaq technology stocks. As we near the end of June, the focus will shift to second quarter earnings and these updates could highlight other sectors and overlooked stocks. Despite the big sell-off in the technology sector on Friday, it is far too early to say whether a sizeable correction will now begin in the technology sector or the major market indices. This could just be a mere pause and consolidation as noted by past ugly candles in the following chart in what is still a strong bullish trend for the Nasdaq 100. However, we need to monitor Friday’s notable drop for the index in chart below which could lead to a further breakdown of technical support levels in the technology sector going forward because it has been the major sector leading and holding up the major market indices – stay tuned. Info provided by Castle Fincacial on Monday June 12, 2017.
Warmest Regards,
Kevin Aizenshtat
Realtor