Booming Tech Stocks Masking Hidden Bear Market Lurking within S&P 500

The S&P 500 is on a tear and more and more investors are pouring into the market, afraid to miss out on additional gains. But there is more to the S&P 500’s record run than meets the eye. Technology stocks are doing well but there are dozens of one-time bellwether stocks that are in bear market territory. This suggests the U.S. economy is not as robust as many think it is. And it should give investors pause.

We are officially in the longest bull market ever. Since the stock market bottomed in March 2009, the NYSE has advanced 210%, the tech heavy NASDAQ is up a whopping 512%, and the S&P 500 has soared 335%. Meanwhile, the TSX has enjoyed a 115% run.

While these numbers are certainly worth celebrating, it’s also a double-edged sword. It means the markets are responding to solid economic data. But because the markets are cyclical, a record run also means a stock market correction is long overdue.

Overweight Tech Stocks Carrying S&P 500

We’re in a comfortable bull market. But the bull market is being supported by big technology stocks. The S&P 500 is near record territory and is up an impressive 14% since hitting its low for the year in early February.

What most investors don’t realize though is that the technology sector makes up 26% of the S&P 500. This is the strongest weighting since it peaked at 29% in 2000. Including Amazon (NASDAQ:AMZN), the tech industry represents a bigger part of the S&P 500 than it did when the internet bubble peaked in 2000.

Technology stocks are behind more than half of the gains the S&P 500 has realized this year. A year in which Apple (NASDAQ:AAPL) and Amazon have become the first companies to have market caps of $1 trillion.

It’s not just Apple and Amazon that are doing well, the S&P North American Technology Sector Index ETF is up an impressive 24% since the start of 2018.

Trade Tension Has Other Big-Name Stocks Struggling

But, within those rosy technology numbers, there is a disturbing trend. Outside of technology, some big stocks are struggling.

• Harley Davidson, Inc. (NYSE:HOG) is down 16% year-to-date
• Goodyear (NASDAQ:GT) is down 31%
• Ford Motor Company (NYSE:F) is off 28%
• General Electric (NYSE:GE) has fallen 27%
• Stanley Black & Decker (NASDQ:SWK) is down 15.9%
• Whirlpool Corp. (NASDAQ:WHR) has tumbled 33.7%

These, and many more household names have missed out on the big gains technology stocks have made because trade tensions and raised costs have but into profits, forced them to quit projects, and dimmed their outlooks.

A large number of stocks, like traditional bricks-and-mortar retailers and consumer defensive stocks, which have little to do with trade, have being struggling with industry pressures.

All of this goes to show that you can’t judge the current bull market solely by looking at the charts. There’s a lot more to the picture.

Learn-To-Trade.com, Canada’s Leader in Stock Market Trading Courses

The bull market is in record territory but not all stocks are enjoying the ride. In fact, one could argue that the technology sector is helping hide the fact that many major stocks in the S&P 500 are in bear market territory. This has lulled many investors into a false sense of security. The trading experts at Learn-To-Trade.com can show you how to read the markets, watch for trading cycles, understand the risks, and profit whether the markets are going up, down, or sideways.

Learn-To-Trade.com is Canada’s leading and oldest provider of stock market trading courses. Investors who take Learn-To-Trade.com’s stock market trading course will learn how to spot market trends, read charts, and understand fundamentals, as well as learn about commodities, futures, foreign markets, stock index trading, cryptocurrencies, blockchain technology, and forex trading. They also learn about risk management and capital preservation.

At Learn-To-Trade.com we also understand that no two investors are alike, that’s why we provide a unique, Lifetime Membership that allows you to re-attend any part of the program as often as you’d like.

To learn more about Learn-To-Trade.com’s stock market trading course, contact us at 416-510-5560 or by e-mail at info@learn-to-trade.com.

Photo Credit: iStock.com/ipopba

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George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members. Add me to your G+

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I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

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The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

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Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

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Hi George, I just wanted to thank you again for the amazing work on the tutorials especially Options trading.   Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!
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