Bullish on tech stocks?

The key issue right now is whether the housing virus is spilling into the broader economy. Weak earnings in manufacturing (domestic) and financials are indicating a possible spillover. Although the employment situation seemed pretty positive last month, it may be only a matter of time before employment numbers break lower. Despite this ongoing debate about a possible recession, tech stocks have outperformed the dow/s&p since the subprime crisis came to light. Also, look at the bottom graph to see how the nasdaq is still very undervalued relative to the dow. Compared to the late 90's, technology in many sectors (consumer, internet, alternative energy, healthcare etc.) has advanced dramatically (also increasing global market share), and it will be interesting to see how tech stocks weather through increasing U.S. recession pressures. Last week's Google earnings and today's Apple earnings are bullish for tech stocks.

[NDX/INDU: 2-year chart]


[NDX/INDU: 10-year chart]