Is The Technology Sector Setting Up For A Crash? - Part I

One thing that continues to amaze our research team is the total scale and scope of the Capital Shift which is taking place across the globe. For almost 5+ years, foreign investors have been piling into the US stock market chasing the stronger US dollar and continued advancement of US share prices. It is almost like there is no other place on the planet that will allow investors to pool capital into such a variety of strong assets while protecting against foreign capital risks. Yet the one big question remains – when will a price reversion event hit the US stock market?

So many researchers, even our team of researchers, believe we have found the keys to unlocking when the price reversion event will take place. Time-honored technical analysis techniques have set up very clear triggers that were negated by higher prices and continued upside trending. What is certain at this point is that the Capital Shift is going to continue until it stops – at some point in the future.

Our research team decided to take a look at the FANG index and the individual symbols that make up that sector to see where the real strength and weakness exist. Our goal was to attempt to understand how and when a potential price reversion event may take place and how this event may be correlated to the global contraction event related to the Coronavirus spreading across the planed while paralyzing certain economies. Could the Coronavirus event be the catalyst that sets off a breakdown in the technology sector?

There are three components we want to start our focus on in this, Part I, of this research article. First, the very real possibility that we are “rallying to a peak” at some point in the near future.  Second, the Custom Volatility Index highlighting continued overbought price action and the very real potential for a breakdown in price from these inflated levels. Lastly, the FANG index itself suggesting we are very near to upper price boundaries after capital has poured back into the US markets in early 2020.

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