Have We Reached Bottom?Another rough day in the markets yesterday although at least Converge finished in the green. GLTA
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I noticed an interesting thing the other day, with the CPI announcement in the US causing a sudden severe tech market downdraft. Tech stocks such as Amazon went down about 6% and have stayed there. Smaller Canadian tech stocks didn't however. I hold both Converge and Topicus and they are both trading higher than they were two or three days ago. Does this decoupling mean that smaller Canadian tech stocks may have bottomed? Ie. all of the weak shareholders have been flushed out and mostly long term holders now hold the shares? It could be a bottom, but then again could mean absolutely nothing. We would not take single day moves into much consideration. That being said, small and mid caps dropped early, and historically tend to lead markets out of recession. They are very very cheap versus large caps right now, and most have domestic revenue (no worries about the war, China, etc) and many are in strong financial shape. On Tuesday the US also experienced the same thing, with small caps declining less. Sentiment has been so negative that a bottom is at least 'likely' forming. (5iResearch)