As tech stocks decline, bank stocks are "breaking out" as the market rotates into the financial sector. According to experts, the longer it takes a sector to bottom and then break out, the more powerful the trend will be, as everyone who could leave already has. It is true that, to some, there are many parallels between the current market and the market that contained the dot-com bubble.

But to others, the tech-driven stock rally in late 2017 is far more stable than the dot-com stock rallies ever were, because the rallies now are hinged on something more substantial than valuation, or value based on externally assigned perceptions of value, alone. Tech companies hold robust levels of cash," and these will only grow after President Trump's proposed "repatriation tax holiday." As of October 2017, tech is the only sector in the S&P 500 index with more cash than debt on the corporate balance sheets. Tech IPOs make up a far smaller portion of the market than previously, and the proportion of investment funds with a tech focus is half of what it was around the turn of the millenium.

But the world of tech stocks remains imperfect. Due to the crowded nature of the sector, investors have tended to cluster around stocks that have been "proven winners." As a result, institutional investors tend to sell, rather than buy. Currently, tech sits at approximately 24% of the S&P 500, which exceeds the 20% level that historically portends underperformance over next 12 months. Hedge funds are beginning to turn their backs on tech stocks.

The financial sector was the hardest hit during this past recession. Among the companies who have gone away, but were once iconic American institutions, include Lehman Brothers, Bear Stearns, Wachovia, and Washington Mutual. Furthermore, AIG (AIG  ) and Merrill Lynch (BAC  ) needed bailouts, and Citigroup (C  ) is still down 85% from its levels prior to the recession.

The current sector rotation from tech to financials takes place because investors are switching gains from a sector that once skyrocketed to another sector that has yet to move higher. All in all, the question of whether to continue buying tech stocks or not will be debated, but rest assured that market conditions no longer resemble those in the days of the tech bubble.