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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Tuesday, September 22, 2009

Stocks -- Tech Sector Leadership

The broad info. technology sector has exhibited relative strength
vs. the market (SP500) since the late spring of 2008. The
relationship has been a volatile one for sure, but the leadership
tech has shown makes it worth watching not only as a sector to
search out for candidates, but one which, because of its economic
sensitivity and substantial p/e ratios, could cave in early in a market
correction. You have to keep in mind that a loss in relative strength
by a particular sector may simply spell normal rotation in a
cyclical market and not be a precursor of a correction. But I say
attend to the tech sector vs. broad market closely for now for
the former has the bigger trading profits to be protected, and,
because individual sector rotation which comes after a lengthy
period ofrelative strength frequently indicates increased investor
concern about "the story" behind the market advance.

Tech sector relative strength chart is here.

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