What The FAANG Stocks Say About The Market

But beware, the opposite is also true. If the darlings start to sell off, as they did in February, look out below!

An early warning light will go off if the Great Gang starts to diverge. If some are faltering while others are holding up, it may just be a matter of time before investors take precautionary profits in the holdouts before they turn down – which, of course, will cause them to ultimately turn down.

And that could start a negative feedback loop hitting the FAANG stocks, as investors with ten years of profits take some off the table, index managers sell them, and the rest of the stocks in the indexes fall along with them.

That’s how important the FAANG stocks and Microsoft are now to the entire market.

If you’ve been looking for that elusive magic leading indicator of market movement, now you know it exists.

And knowing that just one cluster of five (six if you count Microsoft) stocks could make or break the market is a bit scary to imagine.

There’s no certainty with energy stocks, pharmaceutical stocks, even our tech darlings. The only thing that’s certain with the stock market is its inconsistency.

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