- Investors should trade tech stocks ahead of a potential underperformance, warns Larry McDonald in his Bear Traps Report, per CNBC.
- "Getting out in front of the rotation is more important than valuation – as capital flows out of highly concentrated trades it has to go somewhere in a bull market. It's a growth into value tsunami," McDonald writes about tech stocks.
- The strategist also notes that the volatility measures for the S&P 500 and the Nasdaq 100 have spread to the largest difference since 2004, but the gap should close shortly.
- McDonald attributes the gap to investors moving away from growth stocks in favor of value stocks.
- Tech stocks have experienced recent pullbacks including the high profile FAANG stocks: Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and Alphabet (NASDAQ:GOOGL) (Google).
- Semiconductors took a rough hit but have started to rebound. The Philadelphia Semiconductor Index is up 2.13%.
- Semiconductor ETFs: SOXL, SMH, SOXX, USD, XSD, PSI, SOXS, SSG, XTH, FTXL
- Now read: AMD Remains A Risky Investment In The Semiconductor Space
Original article