In February 2021, the NASDAQ Composite stock index began to underperform the S&P 500… and this has continued for the past 45 months.
Today, we highlight the long-term chart of this Nasdaq to S&P 500 ratio price performance, along with key observations and concerns.
Looking at the chart below, we can see that the long-term trend for this ratio remains up. That said, the past 45 months of underperformance is concerning. Note where this ratio peaked in 2021 (right where it peaked back in March of 2000 — double top pattern, perhaps?)
Looking forward, we have a confluence of overhead price resistance levels that this ratio will need to clear for the Nasdaq to confirm it is indeed leading once more.
If this resistance holds and the Nasdaq continues to under-perform (meaning the ratio starts heading lower again), then investors might have reason to be concerned. After all, tech stocks have been leadership in the market for the past 20 years.
Tech bulls had better step up here and now. Stay tuned.