Tech: Getting Closer to a Breakdown
Price for NDX and QQQ closed at a critical level - Some magnificent seven joined the selloff today - Daily levels for tomorrow - NFLX notes.
This week, we have been tracking developments in the tech sector, specifically focusing on the divergence between the “Magnificent Seven” and the semiconductor industry. Until yesterday, the Magnificent Seven (AAPL, MSFT, AMZN, NVDA, TSLA, GOOG, and META) had been cushioning a broader tech selloff, with bullish moves mitigating the decline in semiconductors (MU, AMD, TSM, QCOM, AVGO, and others).
Today, some of the Magnificent Seven (GOOG, AMZN, NVDA, and META) surrendered their gains, while semiconductor stocks continued their downward trend. As I highlighted last night for SMH, the loss of the 10-week moving average (10WMA) was significant. Furthermore, the loss of 598.8—the central weekly level—along with the considerable distance from the central monthly level, made 590 the key daily level needed to validate any potential bounce in this bearish environment.
Regarding the SPX, I posted last night 7,560.3 as the central daily level for today (CDL), with 7,539 and 7,505 serving as the support levels below. The price bounced this morning from the first support zone and then failed to hold the central daily level (CDL). With the temporary support at 7,539 fading, the next bearish target modeled last night was 7,505, and that level ended up to be the low of the day with precision.
The market closed in bearish mode, meaning the central daily level for Friday will act as resistance. Subscribe and get this proven edge every day, plus the main publications on Fridays, Saturdays, and Wednesdays.
Before we dive into those SPX levels (including today QQQ, SMH, IWM, and other essential ETFs), let’s analyze the status of the latest resolution in tech and the impact of today’s selloff. Also a special note about NFLX.
The most important chart for the entire week builds on the top formation scenario we have been considering since Saturday and tracking in these daily updates.