{"id":26474,"date":"2026-03-05T07:30:00","date_gmt":"2026-03-05T12:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26474"},"modified":"2026-03-04T12:32:29","modified_gmt":"2026-03-04T17:32:29","slug":"trouble-ahead-nasdaq-technology-and-two-more-sectors-turn-red","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/trouble-ahead-nasdaq-technology-and-two-more-sectors-turn-red\/","title":{"rendered":"Trouble Ahead: Nasdaq, Technology and Two More Sectors Turn Red"},"content":{"rendered":"
\n

Managing Editor’s Note:\u202f<\/strong>Today, we’re hearing from our contributing editor Mike Burnick in his weekly Thursday feature. <\/p>\n

\u202fMike has over 30 years in the investment and financial services industry – from operating as a stockbroker, trader, and research analyst, to running a mutual fund as a registered investment advisor and portfolio manager, to being Research Director for the Sovereign Society, specializing in global ETF and options investing. <\/p>\n

\u202fAnd he’s been senior analyst at TradeSmith for three years, running\u202fConstant Cash Flow, Infinite Income Loop,\u202f<\/em>and\u202fInside TradeSmith<\/em>.\u202f\u202f <\/p>\n

\u202fHere’s Mike… <\/p>\n<\/div>\n

Trouble Ahead: Nasdaq, Technology and Two More Sectors Turn Red<\/h2>\n

BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE<\/em><\/strong><\/p>\n

Some cracks are beginning to appear in the foundations of the stock market, according to our TradeSmith Market Outlook indicators.<\/p>\n

And that’s a warning flag of even more potential trouble ahead.<\/p>\n

The tech-heavy Nasdaq 100 Index just slipped into our short-term Health Indicator Red Zone.<\/p>\n\n

\"\"<\/figure>\n\n

You can view this valuable data, as highlighted above, by clicking on the Markets<\/em> tab from the main menu bar of TradeSmith Finance, then clicking on Market Outlook (list view).<\/p>\n

The Short-Term Health Indicator tells you where any asset, stock or index stands relative to TradeSmith’s proprietary algorithm, which measures changes in volatility and the strength of trend.<\/p>\n

When a signal flashes, red or green, it’s designed to alert you to a trend change that could persist for a few months on average. Red zone = down trend, and green = up.<\/p>\n

This is a big reversal of fortune for Nasdaq. From the stock market’s leading index (home of the Mag 7<\/em> stocks<\/em>) in recent years.<\/p>\n

Nasdaq is now lagging badly, down almost 6% from last year’s highs.<\/p>\n

The good news, as you can also see above, is the Dow 30 remain in the short-term Health green zone.<\/p>\n

So far, the epicenter of the selling has been mainly in technology stocks, which make up a very big part of Nasdaq. It hasn’t spilled over yet<\/u><\/em> to the broader stock market indexes.<\/p>\n

However, selling is starting to spread to other sectors outside of tech.  Three of the 11 S&P 500 sectors recently dropped into our short-term Health indicator Red Zone as well.<\/p>\n\n

\"\"<\/figure>\n\n

As you can see above, Consumer Cyclicals slipped into the Health indicator red zone two weeks ago. Financial Services followed last week.<\/p>\n

And this week the once mighty Technology sector fell from grace, also entering the red zone. Plus, Communication Services entered the yellow zone (think caution<\/em>), so it could be vulnerable to going red too.<\/p>\n

Subscribers can quickly view this data by also clicking on the Markets<\/em> tab and then on S&P Sectors<\/em> from the sub-menu bar, shown above.<\/p>\n

Notice that the Tech sector has far more component stocks in the Health Red Zone (55.71%) than stocks in the green zone (37.14%). This tells us the majority of tech stocks are under selling pressure.<\/p>\n

You can view this data for any sector (or index) by simply hovering over the green, yellow, red bars to the right of each sector.<\/p>\n

Bottom Line<\/strong>: Three of 11 sectors in the red zone may not seem all that negative. After all, seven other sectors remain in the green zone (with one yellow<\/em>). The problem is that Financial, Consumer and especially Technology sectors combined account for over 50% of the S&P 500 by weight. That means unless these sectors can soon stabilize, and better yet rebound, they are large enough to potentially drag down the rest of the market.<\/p>\n

Good investing,<\/p>\n

\"Signature\"<\/p>\n

Mike Burnick
\nContributing Editor, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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