08.02.2022
More downside for spec tech?
The chart below shows the spot price of IGV, the iShares ETF for US software, versus Qi’s macro model value.
After a 2 month down trade, IGV has been consolidating at recent lows. Some may hope a bottom is being formed. Macro conditions, however, have deteriorated sharply again. That’s prompted a bearish divergence pattern on RETINA™.
After a 2 month down trade, IGV has been consolidating at recent lows. Some may hope a bottom is being formed. Macro conditions, however, have deteriorated sharply again. That’s prompted a bearish divergence pattern on RETINA™.
Moreover, the pattern is identical across a range of speculative technology names. Global X’s FinTech ETF FINX , cloud computing ETF CLOU, Internet ETF FDN, GNOM the Genomics & BioTech ETF plus biotech funds IBB & BBH.
All show the same bearish divergence pattern between spot price which is flat-lining & macro fair value which is falling.
All show the same bearish divergence pattern between spot price which is flat-lining & macro fair value which is falling.
There are some subtle differences between models but there is a clear pattern too. The sharp move lower in macro fair value over the last week has been driven primarily by rising US real yields, wider credit spreads & rising QT expectations.
All these models are in strong macro regimes & the same 3 macro factors feature prominently each time. The Fed’s hawkish pivot is a headwind for these tech names to perform &, on current levels, the bad news is not fully priced in.
All these models are in strong macro regimes & the same 3 macro factors feature prominently each time. The Fed’s hawkish pivot is a headwind for these tech names to perform &, on current levels, the bad news is not fully priced in.
