FLASH INTRADAY: Decent odds (51%) that Technology sector made its "low" for the 1H2021, maybe for the year

STRATEGY: Technology might have made its “local” low for 1H2021
We are sending out this alert, because we believe there is a decent chance (51%) that the Technology sector made its “local” low for 1H2021.

For context, as you know, we have been urging our clients to overweight Epicenter stocks in 2021, with a particular focus on Energy.  Energy has been our Strategy focus in 19 of our last 40 daily notes, so we have been urgent in wanting investors to have exposure.  Moreover, we have written about the crowding of Technology ownership and our general leeriness of Growth stocks.

However, given today’s carnage, following the Feb jobs report, the NASDAQ was >13% off its highs and Technology stocks were getting liquidated.  In fact, the super-growth ARKK ETF fund was down to a greater extent.

This is what makes a local bottom.  We believe this is likely the 1H2021 low for Technology stocks and would be buyers.

We could be wrong.  But check out some of these charts

On the 30 minute chart, the S&P 500 Technology Sector registered what looks like a “qualified 13 Buy countdown” 
– DeMark is a counter-trading system so it means the price level at 13 is key
– If Technology reverses here (higher), it is a sign that selling is done

So far, so good

FLASH INTRADAY: Decent odds (51%) that Technology sector made its low for the 1H2021, maybe for the year

Source: Bloomberg


Same story with the ARKK ETF.  This ETF is holders of the growthiest and sizzliest of Tech. 
– down 33% in the past two weeks
– see the qualified ’13’?


FLASH INTRADAY: Decent odds (51%) that Technology sector made its low for the 1H2021, maybe for the year

Source: Bloomberg


Bottom line: Technology sector “local bottom” — but we like Epicenter and urge investors to get more Energy exposure 
So we think the selling of Technology, or at least the sloppy selling, is likely over.  We are only assigning 51% odds, since COVID-19 and bond markets are highly unpredictable.

Technology companies are expected to prosper in 2021.  Fundamentals are good.

We prefer Epicenter stocks, and Energy more.  But I think Technology stocks are due for a monster rally.

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