NASDAQ to S&P500 ratio on 15year Support. Will it finally break?

The Nasdaq to S&P ratio is testing for the 2nd month in a row its 1M MA50 (blue trend-line), which has been the Support for the past 15 years (hasn't closed a month below it since May 2007). This shows how strongly the tech sector has been outperforming the S&P500 index. This is the first time that the 1M MA50 is being tested on consecutive months since July 2013.

If it breaks it is another indicator that tech companies will start to heavily underperform relative to the rest of the industry, which may in turn show the end of this era. If we close a month below the 1M MA50, most likely the pattern breaks lose and it tests the bottom Fibonacci levels, eyeing even the 1M MA200 (orange trend-line) if this correction turns into a recession.

Do you think it is time for tech to underperform?



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