Bull Flag Fails, But Lower Support Holds So Far

The bull flag failure on the SMH yesterday is concerning. The price closed back at weekly break out support so it is very important that the SMH hold here if the health of the market's uptrend is to remain in tact. We are still reasonably confident that support will hold as underlying stocks look much better than the tech indices at this point. In fact gainers outnumbered losers yesterday even though indices traded in negative territory. Weakness in INTC most likely caused some to misread the direction of the broader market causing some fear based selling. Even though we are still bullish here our bullish position can change quickly if the market follows through and closes out the week on a negative note. It is important to remain objective and not let hopes get in the way of realities. As of the time of this writing, there does not appear to be anything to worry about.