Prepared for you by Randy Dunham
October 14, 2026
THE PRINT
Technology’s relative strength is at an extreme. History suggests the group could lag over the next 50 trading days.
THE CHART(S) / DATA
The chart shows the 50-day return spread between equal-weight technology (RSPT) and the equal-weight S&P 500 (RSP) since 2007.
→ When the red line is above zero, technology has outperformed the broader market.
→ When it’s below zero, technology has underperformed.
Note: This uses the equally weighted ETFs because it gives a fairer view of the basket’s performance.
A few points on this:
Technology has outperformed the broader market by 11.5% over the last 50 trading days. The spread peaked at 18.9% on October 7.
Historically, technology has outperformed the market by an average of 1.02% over a rolling 50-day period.
The +2 standard deviation level is 10.02%. The spread has crossed this level 10 times before.
The last comparable stretch was April–July this year, when the spread reached an unprecedented 8-standard-deviation move.
The spread remains above the +2 standard deviation level — a distinct threshold for future returns.
Historically, when the spread is above this level, RSPT has underperformed RSP by an average of 1.21% over the next 50 trading days.
Additionally, news of progress by China’s top memory chip maker adds another potential headwind for technology. It could give traders/investors a reason to take profits on recent tech gains.
Takeaway: Technology’s relative strength is stretched, and history suggests the group could lag over the next 50 trading days. Developments in China’s chip industry could add to that pressure.
THE TAPE
THE HIGHS AND LOWS
SPREAD THE WORD!
CHECK OUT OUR TWITTER AND YOUTUBE TOO!
Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.