Technology stocks are still going higher. Just not the ones everyone keeps pointing at.
The familiar leaders have been stuck. The Nasdaq 100 hasn’t made a new high since October.
Same story for the large-cap S&P 500 IT Index. If you only look at the biggest names, it looks like tech has lost momentum.
That timing is worth noting.
The last time those mega-cap tech indexes made new highs was the exact same day Ron DeSantis took to social media to argue that these were the only stocks holding the market together.
That tweet marked the peak for those indexes. They’ve gone nowhere since.
Markets have a funny way of humbling confident narratives.
When politicians start talking about what stocks are doing, history suggests paying attention. Often as a contrarian signal.
And, once again, the market did the opposite.
Since October, technology hasn’t weakened. It has rotated. While the largest names stalled, the rest of the sector quietly took over.
On an equal-weighted basis, technology continues to make new highs. Small-cap tech is making new highs, too.
So it turns out the stocks we were told were the only ones working are the only ones that stopped working.
Meanwhile, nearly everything else in tech kept pushing higher.
Classic.
New Highs tor Technology
What matters is this: Technology is still making new highs.
The equally weighted technology Index pushed to fresh all-time highs yesterday.
On the same day, small-cap technology also closed at its highest level ever:
That’s not weakness. That’s strength. And, more importantly, it’s broadening participation within the technology sector.
What we’re seeing is not tech breaking down. It’s rotation. Specifically, it’s rotation within tech itself.
The mega-cap names have gone sideways, but almost everything else has continued to work.
You can see it clearly in the Nasdaq family.
While the Nasdaq 100 (QQQ), hasn’t made a new high since October, the Nasdaq Next Gen Index (QQQJ) and made up of stocks ranked 101 through 200, just closed at a new all-time high.
That’s how healthy markets behave. Leadership expands. It doesn’t disappear.
When Do Large-Cap Tech Stocks Participate?
Here’s another key point: Technology is not rolling over.
Equal-weighted technology is at new all-time highs. Small-cap technology is at new all-time highs. Meanwhile, large-cap tech has been moving sideways:
That combination matters.
What I’m watching in large-cap tech is momentum. The Relative Strength Index (RSI) has been behaving exactly the way you would expect in a healthy uptrend.
RSI has stayed elevated and hasn’t reached oversold conditions.
That’s not distribution. That’s digestion.
If this index were breaking down – if momentum were collapsing into oversold territory – we’d be having a different conversation.
But that’s not what the data says.
Now ask yourself this: Has the rest of the market struggled while mega-cap tech has been consolidating?
Not even close.
Participation has expanded. More stocks, more sectors, and more industries have been working. The market has gotten stronger beneath the surface, not weaker.
So what happens if the Microsofts, the Apples, and the Nvidias of the world start pushing higher again?
That’s upside fuel.
The real risk is not large-cap tech going sideways. The risk would be large-cap tech falling apart.
And, until that happens, this market is doing exactly what healthy bull markets do.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs