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Tech is powering the rally in an ‘uneven market,’ macro expert says

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Tech is powering the rally in an ‘uneven market’

Technology stocks' big gains this year have contributed a disproportionate amount to the market's rally, and that has some concerned about tech's next move.

Larry McDonald, editor of the Bear Traps Report, explained on CNBC's "Trading Nation" why he's warning against stepping into tech at these levels.

• While the S&P 500 has risen nearly 4 percent this year, much of the market's gains have come from two big stocks' rallies: Microsoft and Amazon, up a respective 19 percent and 44 percent in 2018.

• Six other stocks (Apple, Netflix, Intel, Mastercard, Nvidia and Facebook) make up much of the market's positive return this year. That concentration raises concerns, creating an uneven market with its gains distributed mostly among a select few tech heavyweights. This composition within the market sometimes leads to the fear that a sector is getting "crowded."

• Investors have been hiding out in big tech amid mounting trade-related tensions, political unrest abroad and a recent sell-off in emerging markets.

Bottom line: A handful of technology stocks are adding outsized gains to the market's overall rally this year, and that has McDonald concerned about growing risk in the sector.

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