Bears Growl, But We Expect a Push Higher

Blue chip stocks continued to hold near their highs yesterday as tech continued to experience pressure. The slow drift of stocks here can be much more frustrating than a quick downside move since it make support levels bend but doesn't clearly break them. This activity has caused options traders to heavily buy puts into the dips in the tech sector. Logically this makes no sense since they are betting on a breakdown before they have confirmation. Options traders are typically not logical traders though, but rather emotional traders. The actions of this group make for a very strong contrarian buy signal. This is confirmed by the fact that weekly charts are showing strong buy signals even as daily charts are experiencing weakness. The weekly view is always more accurate. We are looking for the tech sector to make a good run as we head into the end of February, which should last into early March. We don't know what will happen after this run. Some are getting quite bearish here, but we plan to just play what is in front of us and not let convictions override reason.