Why 24% Is A Number We ALL Care About

24%!!! 

That is how much AAPL, MSFT, AMZN, FB, and the GOOGLE twins now make up of the S&P 500…

Think about that:

1% of the S&P 500, just 5 companies, are now a quarter of its value!

You know what’s even more crazy??

ALL of those stocks are a part of the NDX (Nasdaq index) as well.

Except there they make up 47% of the index!

If you add in TSLA to those 5 names, you have HALF the value of the NDX index.

What are the ramifications on the stock market?

I can tell you this much:

Rotation out of those names and into industrials is not going to just leave the S&P flat…

Tha’ts major volume playing musical chairs trying to figure out when to leave and get out of those big names. The danger is when they all know it…and we are there.

Right now, as I type this money is looking for places it can profit.

Algos are  looking for short term trades.

The momentum trade the algos love is going to push the ‘BIG 5’ higher, because it has been working.

But these algos can turn off on a dime.

When that trade isn’t working money is trying to find a new home in industrials and financials.

This is cause no one wants to get left holding the bag on the Big 5 when the gig is finally up.

Everyone wants to be the 1st to ‘rotate in’ to industrials.

What I worry about is that there could be news that causes money to just leave…

and we could have a day where we drop 5-10% in an afternoon.

This is a market NO ONE has seen, and so called experts are kind of flying blind.

However, my years in this market is something to lead me to one conclusion…

The smart money went all in tech months ago, the dumb money is chasing.

I believe the next market rout will be on the tech side, and industrials could lead us higher.

There is more risk to the leaders from a successful vaccine than there is if we are stuck in this limbo land for another year.

Traders and investors need to know what to do, when a truly positive trial, from a US based company is announced,  because it is going to cause the most loved hedge fund hotels…

to break.

Be on your toes.

Your Only Option,

Mark

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