Major sell off in Tech names
Without much bad news the sell off is usually suspect.
One week before, the unemployment report created a sell off and the market seemed to recoup from that, and for a few good trading days, the action to the upside or the bounce was faded by the bears. The current key supports in SPX, NDX and $DJI has vanished and the plunge continues towards lower moving averages and rising trend lines. SPX may test its long-term trend line at 1794-1800 levels. RUT is already testing its 200 day moving average.
Next week, if these tests are complete, and the bulls take action, lots of upside reversals can be in play. Smart money is selling? You must have read that on popular sites. But the article fails to provide where the smart money will park its cash after getting out of the market in a recovering economy. May be in real estate, but that takes time to show up on balance sheets. The smart money will soon be buying at key supports around 200 day averages IMHO and the wait is worth it for us.
Meanwhile GOOGL, PCLN and NFLX all are at or near supports and should a bounce come it will be solid and convincing as these name are way oversold and beaten down. Most bargain hunters and others who missed the run may join in and chase the market as we have seen in the past. Caution is the word and if you cannot short this oversold market, wait on the sidelines, and find a proper entry.
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