I know I have been talking a lot about a rotation into tech, and have been sounding off pretty confident that the Nasdaq is going to outperform the Dow and SP. But I have more reasons to support my analysis.
I have looked at some scans and have noticed a lot of tech stocks building bases that show proper volume characteristics on up and down days. The stocks I mentioned on Thurs and Friday are not mentioned (so include those with these) in this list.
NTAP HTCH ISIL MRVL NTGR VSEA ATMI TTN TXN SEBL
I can not argue with the great price/volume action I am seeing in these stocks, but I do respect the fact that all indexes are trading below their 50 dmas so I remain cautious until a move of 1.7% comes on heavier volume than the day before and above the 50 dva on the indexes.
The markets are all in short term uptrends, intermediate term downtrends, and long term (2002 bottom) uptrends. The Nasdaq is in much better shape than the Dow and SP, and my gut and charts tell me that the negativity in the crowd on techs could prove to be very bullish.
But if the Nasdaq all of a sudden falls 2% on heavy trade and all my beautiful tech charts get busted, I will turn bearish on tech, of course.
I, btw, have not been bullish on the technology sector since 1999 and the early days of 2000 with all the bubble internet/software stocks. It has mostly been select sectors and small caps.
Which brings me to my next point. I am seeing a lot less high quality small cap stocks show up on my scans. I wonder if the steam has run out of this engine for now?
Be back on Monday. Unless I think of something else to talk about.
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