What To Do About The Nasdaq Tech Rebound

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The tech sell-off that had been picking up speed for the past month stopped in a hurry Wednesday – seems all it took was a peek at tame Fed inflation data to put investors back in the buying mood.

By midday yesterday, the tech-heavy Nasdaq Composite was up more than 6% from its Monday low of 12,609, paring its one-month decline to just under 5%; there's every reason to think that decline will shrink even more as today's session finishes up.

But here's the thing…

I'm looking at the Nasdaq Arms Index right now, which measures market breadth by volume – you divide the ratio of the number of advancing stocks to sinking stocks by the ratio of the volume of advancers to the volume of decliners.

But you don't need to worry about that math. The index reading right now is 0.477; a lot of Wall Street pros would call that "panic buying," but these days most people would call it "FOMO" – fear of missing out.

Investors are hopping on the bandwagon, but I don't think the ride's going to end well.

Will tech ultimately recover and move back into a leadership role? Sure.

Is that happening right now, today? Doubt it.

It can be great to be early, but you can also be too early. Here's what I suggest…

Don't Worry If You Missed Out

What a day…

You had Tesla Inc. (NASDAQ: TSLA), which had lost something like 40% of its value since the end of January, blasting ahead 100 points – its biggest single-day gain in more than a year.

Apple Inc. (NASDAQ: AAPL) rose 4.5%; Microsoft Corp. (NASDAQ: MSFT) rose more than 3%.

Those stocks are worth $4.3 trillion altogether, and they took off like a shot, just like that.

Talk about trying to hop a speeding freight train – this was like trying to jump one of those 200-mile-an-hour bullet trains they've got in Japan. The Wednesday-Thursday rally on the Nasdaq was so fast and so unexpected that a lot of investors didn't really have time to jump.

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