The Nasdaq 100 has gone a near-record 303 trading sessions without a pullback, leaving some investors concerned a stock market crash may be just around the corner.
Is it?
Well, according to Jonathan Krincsky, Chief Market Technician at BTIG, the Nasdaq’s recent winning streak may inherently mean the index is primed for a some sort of reversal, if not a full-blown selloff.
“Some sort of shakeout is likely coming, in our view,” Krinsky told MarketWatch.
Based on the Invesco QQQ Trust Series ETF (NASDAQ:QQQ), the Nasdaq 100 has notched 14 record highs this year, achieving its most recent record just this past Friday after jumping more than 1.5%. The index’s last pullback dates back to Dec. 15, 2022, with a drop of more than 3%.
That said, the index has shown some surprising weakness this week. Indeed, the Nasdaq is down 1.6% at the time of this writing after losing 0.4% on Monday. While it’s too early to say whether this marks an end of the index’s historic bull run, the lucky streak may eventually snap.
Stock Market Crash Looms Large as Nasdaq’s One-Sided Bull Run Loses Steam
Interestingly, the Nasdaq’s climb has been mostly without the gains of once-upon-a-time tech darling Apple (NASDAQ:AAPL). Indeed, the iPhone maker is actually down more than 8% so far this year.
Not alone, fellow Magnificent Seven member Tesla (NASDAQ:TSLA) is also well in the red so far in 2024. The electric vehicle (EV) maker is down more than 25% since the start of the year, one of the biggest losers in the market.
According to some, this may mark the end of the “Mag 7” era and the start of an artificial intelligence (AI) dominated market. That would have companies like Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) leading the charge.
Reasonably so, Nvidia in particular is up a staggering 75% so far this year as the face of the AI movement, a la it’s AI-optimized video cards.
“[T]he dispersion under the surface shouldn’t be ignored. Yes, it’s encouraging to see some broadening beyond the ‘AI’ trade, but the continued one-way move in many momentum names is ultimately going to have some ramifications, even if only short-term in nature,” Krinsky noted.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
