By Imre Gams, analyst, Market Minute $3 trillion… That’s more money than the entire annual GDP of the U.K., France, and Italy. It’s also how much the world’s biggest tech stocks – like Alphabet (GOOGL), Microsoft (MSFT), and Meta Platforms (META) – lost in combined value by October. Almost nobody was safe. But since then, the tech sector has been able to stage a small comeback because it’s very sensitive to interest rate fluctuations. Higher interest rates – or even the prospect of higher rates – tends to push tech stock valuations lower. And with inflationary data slightly softening, the market has gotten bullish on tech once more… | Recommended Link | | Get this master trader's new approach to trading. It works! The 3-Stock Retirement Blueprint When most folks think about making money through the markets, they think “buy and hold.” They think “diversification.” And they think about investing in things like index funds. But this man has a different approach. It’s called the “3-Stock Retirement Blueprint.” It’s a way to play 3 stocks – yes, just 3 – and potentially make more money than you would by trading the rest of them… Sound impossible? | | | -- | |
The hope is that the Fed will look at this data and consider softening their current rate-hiking stance. As a result, the SPDR Technology ETF (XLK) has rallied 20% off its October 13 lows. But is this just a relief rally in an ongoing bear market? Or is it possible this rally has some real legs underneath it? Let’s look at a price chart of XLK to find out… 
(Click here to expand image) The key features of this chart are the two moving averages (MA). The 100- and 200-period MAs (blue and green lines) are long-term… And they usually do a great job of showing us the underlying trend. Here’s an easy way to use these two MAs… If price is trading above the averages, then we’re in an uptrend… if price is trading below the averages, then we’re likely in a downtrend. As you can see, XLK has been trading below both moving averages for a while. But now, prices have poked above the 100-period MA while remaining below the 200-period MA. When we’re between moving averages like this, the market can enter a state of neutrality. There’s still downward pressure on XLK, but there’s clearly some buying interest that’s entered the market. The question is whether this interest is enough to carry XLK above both moving averages. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. | Such an event would result in a potential reversal of the downtrend that’s been in place for most of this year. If XLK can’t break above the 200-period MA, then we’re likely headed lower. This is what happened with XLK back in early August. Take another look…
(Click here to expand image) The market was able to break above the 100-period MA but stalled out against the 200-period MA. And this led to XLK breaking down to new lows at the end of September. For traders, a market is at its most dangerous when it’s in a state of neutrality because prices could break either way. Bill Gates, Jeff Bezos & More Billionaires buying $4 Stock I prefer to scale out of any existing positions as a market moves toward these areas. Then, I’ll wait and see which way the market will break… It can’t stay neutral forever. Once the next directional move is clear, I’ll hop back onboard. That’s the key to good trading... keep it as simple and stress free as possible. Happy trading, Imre Gams
Analyst, Market Minute Reader Mailbag What do you think is the next move for the tech sector? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. In Case You Missed It… Is there a safe place to put my money? Millionaire investor Brad Thomas has discovered 500 of the fastest-growing companies in America in terms of revenue growth over the last 3 years, with growth starting at 212% and going all the way up to 87,037%. Even in the best years, gains like these have been almost unheard of, but Brad has identified 500 companies that are making money like crazy. All you need is this one ticker, and every time these companies make money, YOU make money. Today, tomorrow and for the rest of your life. To learn more, watch his latest video here now. 
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