Technical Picture - Tech Wreck Weighs on Broader Markets

The chart above shows S&P sector performance since the return from labor day weekend.We see that while technology fell 5%, financials spiked by 5%. Most sectors are positive so it is difficult to determine if the weakness in technology will spill through to other sectors and result in a sharper correction for the broader markets.

The next chart is a 20 year monthly chart of the ND.  Here we see that large cap tech stocks have retraced 50% of the tech bubble highs. This is the second rejection, the first being in April 2112, and the second in Sept. after briefly, breaching the 50% level.

The next chart is the daily ES, NQ, and YM futures.  As I wrote on Thursday, the NQ was going down to 2675.  By the end of the day we blew below that level.  Yet, the broader markets are still holding the neckline of the extension long levels.

I see a lot of support at NQ 2657, which has traded Sunday evening. ES needs to hold neckline support. I noticed that both ES and YM are coiling (red dots on the TTM squeeze indicator).  The red dots precede price expansion.

Tech earnings will be in focus again this week as AAPL reports on Thursday after the close.

AAPL reached my preliminary target EOD.  If price continues lower tomorrow morning, we will likely have extension shorts from the previous low $623.55 to new lows.  If price holds the -23.6 level, we'll use same anchor 682.62 to 609.61 to determine the next Fib. retracement.

Some of the widely held names reporting earnings this coming week include:

• Monday: CAT, FCX, BTU, PCH, STI, CNI, HMA, MUSA, SWFT, TXN, VECO, WDC, and YHOO.
• Tuesday: MMM, AKS, BEAV, CPLA, COH, DD, HOG, CPLA, PLD, RSH, RF, WHR, AFL, AMGN, BRCM, CHRW, GILD, GILD, JNPR, NFLX, PNRA, NSC, and VMW.
• Wednesday: ALXN, T, BA, BMY, CP, LLY, EMC, GD, LVLT, NDAQ, NUVA, SAP, TROW, TUP, LCC, AKAM, AVB, CTXS, COHU, CROX, EXAR, FFIV, KNX, MERU, RYL, TSO, and ZNGA.
• Thursday: FLWS, AET, MO, BIIB, BBW, CELG, CME, CCE, CL, COP, CS, D, DOW, DNKN, EVR, FLIR, IMAX, MCK, MJN, OXY, PCP, PDS, PG, RTN, SCHN, TZOO, UA, ZMH, AMZN, AAPL, BJRI, CLWR, CSTR, DV, EMN, KLAC, NTGR, CODE, SPF, WOOF, VRSN, and WWWW.
• Friday: ARLP, AON, ACI, B, CMCSA, EGO, GT, LEA, LM, ERIC, MRK, OHI, PPC, COL, and WY.