After last week's trend break in the QQQQ and then subsequent lower high formation we would expect that the tech sector will continue to be a tough sector to trade. Nevertheless, we will not be looking for this sector to break down here. Microsoft pulled back just above its 50-day average and found huge buying support on Friday. Likewise, the semiconductors, while quite unexciting as a group, have shown good support in the area around Friday's close. It will take some sort of catalyst to break them down.
Oil is coming under a bit of pressure, but most oil sector stocks are consolidating nicely so we expect the pressure to find dip buyers.
Gold prices are likely to come back to support from current levels, but gold stocks seem to be moving contrary to the dollar right now and not the price of gold itself. The dollar has been in a tail spin and its recent weak bounce is likely to be met with more selling. Next month, however, there seems to be potential for the dollar to find support and rally, which means it's probably a good idea to sell into the next round of strength in the mining sector.
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