FAANG STOCKS IS OVERVALUE??

The proximity ratio of the Nasdaq to the Russell 2000 (NDQ/RUT) has surpassed the historical bubble.com area of 2000 and reached a new record high. This is happening while the Nasdaq has not reached its historical high, and the Russell 2000 small-cap index is experiencing a decline. If we look at the second chart over a period of time, there is a significant divergence between the FAANG index, consisting of large-cap U.S. stocks, and the Russell 2000 index, representing small-cap U.S. stocks. It appears that the seven large-cap stocks alone are driving the growth in the indices, and on the other hand, they seem to have reached overvaluation levels. In my opinion, equity indices have reached the end of a major growth cycle, and we might witness a decline in stock indices and a devaluation of the Russell 2000 index in the coming year.

 From a technical perspective, we are also observing a monthly divergence in the Asch line, which could lead to increased selling pressure.