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Here's why tech is getting whacked while Buffett's Berkshire Hathaway and Chevron are surging: Trader

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Yahoo Finance's Jared Blikre is joined by JC Parets, All Star Charts Founder & Chief Strategist to discuss why tech is getting whacked while Buffett's Berkshire Hathaway and Chevron are surging.

Video Transcript

ZACK GUZMAN: Well, let's check back in on today's trading action, as the NASDAQ is on pace now to officially close in correction territory. We're also seeing oil catch another boost here, hitting a 14-month high. For more on all of today's moves, I want to bring on Yahoo Finance's chart master, Jared Blikre, who has the latest. Jared.

JARED BLIKRE: Yeah, pretty interesting dynamics here. The fourth day of a sell-off that we get in tech and really hitting the NASDAQ hard. Let's look at the charts here on the YFi Interactive. And here is a chart of the NASDAQ. We can see it's down over the last four days nearly 8%. And for the week over the last five days, still down 5%.

And looking inside, we can see a lot of weakness in some of the mega caps, like Apple down 1 and 1/2%, Amazon down 2%. But the losses really accelerating in some of the high flying stocks like Tesla. And Okta down for a second day, software really getting hit this week. So it hasn't been just the mega cap software, and also the chip stocks as well. Let's get a quick read on them-- excuse me. And we do see a mixed bag today, so not quite as bad as it could be.

But I want to bring in JC Parets now, founder of All Star Charts. Because we've been talking for a long time about value versus growth. And I want to pull up this chart I remade from one of your works, one of your newsletters. So this is growth versus value, Russell 1,000 growth versus Russell 1,000 value. And this goes back to the beginning of 2020. What does this chart say to you?

JC PARETS: Yeah, I mean, we're seeing big time rotation into value. And when you think value, what do you think? You think financials, you think international, you think energy. Now, when you look at the NASDAQ, it doesn't have any of those things. The NASDAQ, by definition, is ex-financials, and then when you look at the components of the Qs, it's 0% energy. So the market is doing just fine. Financials are about to close at a new all-time high.

But if you're only looking at the NASDAQ, if you're only looking at growth, you're missing what's really happening all over the world. And it's rotation into value, rotation into international, base metals, commodities. You're seeing that, and it's coming out of growth. And the US has been the beneficiary of such a long period where growth has been outperforming, and international and financials and energy have been the laggards. I mean, who wants to own that stuff? Now it's the exact opposite.

JARED BLIKRE: Well, let's get to a chart here, and this is going to be Berkshire Hathaway. I think the last time you were on, we were talking about this very ticker and talking about it breaking to record highs and the strength of the financial sector. So here we have going back six months. We got a 50-day moving average. Just let me know if you want to see another time frame, and tell me what you see in Berkshire right now.

JC PARETS: Yeah, zoom out as long as you want. What you'll see is you'll see a three-year consolidation in Berkshire Hathaway, as value continued to underperform, particularly financials. Of course, you've got that industrial exposure in Berkshire as well. But let's remember, it's 15% of the S&P Financial Index. So the fact that it's breaking out, I think it has another 25%, 30% to the upside.

Financials-- today is Friday-- are probably going to go out at an all-time weekly closing high. Energy keeps ripping-- Exxon, Chevron, Occidental Petroleum. These names are ripping, and you're seeing the NASDAQ struggle because it doesn't have any of that stuff in it.

JARED BLIKRE: Yeah, well, let's get to Chevron, because you mentioned that chart. And here we have it over a five-year period. Let me know what you see in this. And it looks like we just took out this pivot right here from, I'm assuming that's going to be about April or so in 2020.

JC PARETS: Yep, new 52-week highs. And you know what's hilarious is now it's very sexy to want to buy clean energy and try to save the world through your portfolio. But it doesn't really work that way. Try to save the world in other ways. Trying to convince these people to buy old, dirty, gross energy and old, gross, terrible banks. People are having a tough time with that, and I think it's going to take a long, long time. And I think they have a long way to go before investors start to realize, wow, I do need to be in the gross, dirty energy. I do need to be in these banks I hate so much. You'll see.

JARED BLIKRE: All right, well, we got less than a minute here, but you also mentioned that GDX, the Gold Miners ETF, is on your radar. Gold has taken some hits, some breaking down recently. Do you like this?

JC PARETS: Yeah, you know, there's an old saying. You know, when you're making new six-month lows within long-term uptrends, buy it, right? That's the saying. It doesn't necessarily mean that we're actually going to do that. The way I interpret it is, let's pay a little more attention, right? And when you look at the GDX, you look at all that resistance going back to 2013, right at 31 bucks, right at 31. So that's the level.

If GDX is below 31, we can't own it-- cannot. We only want to be long if we're above that. Just a nice risk-reward, potentially setting up, and I think it's got 40% of upside. So the risk is very well defined. And the potential upside, if this is it, is exponentially greater. That's good enough for me.

JARED BLIKRE: All right, JC. On that note, we're going to toss it back to you, Zack.

ZACK GUZMAN: Jared, appreciate that. Old, gross energy still by far the biggest and top performing sector here in 2021. Very interesting to see that shake out.

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