Thursday, July 06, 2006
Tech continues to under perform, just as it has over the last six or more months. It's early to determine if this is going to have a negative impact on the strength of the latest rally, but this is not a great way to start. The QQQQ pulled back much more harshly than the S&P 500 ETF (SPY). Now the QQQQ has met the mid point of its Bollinger bands, a point that will help mark whether sellers are serious or whether dip buyers are ready to come back in and rescue the tech sector from a retest of the low. The problem with a retest of the low would be that it would do a great deal of technical damage to the weekly chart. By our rules it is important that the QQQQ hold up at Friday's close or we may be looking at another leg lower in the market.