Tech & Bio-Tech; Both Breaking 8-year Support Lines

Bio-Tech and Tech have been stock market leaders for years and years. Below looks what these leading sectors are doing of late.

Bio-Tech/SPX ratio (left chart above) broke below 5-year rising channel last year at (1).

NDX/SPX ratio (right chart above) is attempting to bread 8-year rising support at (2).

Should bulls be concerned that leadership is breaking support?

Bio-Tech (IBB) continues to create a series of lower highs and lower lows since last summers highs. IBB kissed the underside of resistance at (1) and has backed off of late.

Now IBB is testing weekly closing support at (2). If IBB would take out support at (2), selling pressure in the weak sector could ramp up!

The Power of the Pattern is keeping a close eye on the old upside leaders, in case they become new downside leaders.

With the S&P within 4% of all-time highs and the NYSE, Wilshire 5000 and Valu-Line Geometric all up against 1-year falling resistance, what happens with these leading sectors over the past 10-years, could be very important for portfolio construction in the near future.