It may be time for the NASDAQ to cool off: NDX VS SPX
This reminds me of the 1990s dot-com bubble. However, we now live in different times and the NDX is nowhere near as overvalued as it was back in the 1990s.
We must also take into account that the coronavirus pandemic has turned out to be a financially positive event for the tech industry as a whole while nearly all other sectors have been horribly affected (apart from healthcare) and are yet to recover. If there was an index for Mom-and-pop businesses it would still be down 80%.
An interesting trade idea would be to short the NDX and long the SPX with equal weighting across both of the positions.
With all of that being said it's still possible for the NDX to go parabolic from here although I would say it's unlikely here in the short term. I'm expecting a correction then another long term runup.
This is not financial or investment advice.
We must also take into account that the coronavirus pandemic has turned out to be a financially positive event for the tech industry as a whole while nearly all other sectors have been horribly affected (apart from healthcare) and are yet to recover. If there was an index for Mom-and-pop businesses it would still be down 80%.
An interesting trade idea would be to short the NDX and long the SPX with equal weighting across both of the positions.
With all of that being said it's still possible for the NDX to go parabolic from here although I would say it's unlikely here in the short term. I'm expecting a correction then another long term runup.
This is not financial or investment advice.
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