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Large-cap tech stocks ripped higher Wednesday for the fifth straight day — up to another record high, widening their lead over the broader market.
Many investors remain skeptical of the gains this year, as a handful of tech-centered stocks are once again accounting for nearly all the returns in the S&P 500. Comparisons with the dot-com-era boom and bust abound.
To be fair, we have never seen tech at such lofty levels relative to the broader market, as we can see in the chart below, which tracks the ratio between large-cap tech and the S&P 500. Yet, as is often the case in finance, how we got to these elevated levels is much more important than the levels themselves. Pace and direction trump elevation.
Astute chartists and technicians can point to a two-decade-long…
