By John Del Vecchio and Brad Lamensdorf
Technology stocks have taken a beating to start 2022. It has been a bloodbath.
The truth is it has been a bloodbath for technology stocks for months.
Only the largest stocks in the major indexes held up, which masked a massive deterioration in the average technology stock.
Now the market has come after the prominent technology companies, and the Nasdaq indices are taking it on the chin.
Institutional investors are shedding technology shares and are as underweight the sector as in 2008. Right before lift-off.
The chart below shows that technology allocations have fallen sharply.
This may suggest that technology stocks are becoming attractive as a contrarian play.
The market is deeply oversold after the recent pounding in technology stocks. Our favorite short-term indicator, the Short-Term Composite, courtesy of Investors Intelligence ended last week at 6.9.
Could the indicator go lower?
But, much lower.
Tech stocks are poised for a big bounce.
To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad.
DISCLOSURE: LAMENSDORF MARKET TIMING REPORT
Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.
This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s. Active Alts is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader Past performance is not indicative of future results.