NEW YORK (TheStreet) -- The Nasdaq 100 (QQQ) has been under pressure since early March. In-fact, it's down 5% since then. On StockTwits, we continue to see interesting explanations for the sell-off. But we're also seeing signs that the market may be ready to bounce and go higher right now.
Several investors have attributed the recent sell-off to the overvaluation of momentum tech stocks. Mainly companies like FireEye (FEYE), Yelp (YELP), Netflix (NFLX) and Pandora (P). These stocks are all down more than 20% since last month. Other investors have cited an exhausted uptrend, which has manifested in technical breakdowns across the board. In this post, we are sharing 3 possible explanations for the sell-off. But we also want to hear from you -- so please share your thoughts below:
1) Doug Short, who writes daily and weekly columns about the valuation of the stock market, believes that the market could be anywhere from 51% to 84% overvalued. Short likes to compare several ratios like the Crestmont P/E Ratio, Cyclical P/E 10 Ratio, and Q Ratio to their arithmetic means. He uses these valuation ratios to roughly gauge the value of the market compared to its historical levels. Here's the original post that caught our eye -- it was shared on StockTwits: