Round Number Rescue?
All rallies are guilty until proven innocent in the current environment. There will be violent up sessions but they usually peter out pretty fast, with today a great example. On the Nasdaq which is now 25% from its highs made last November, we have seen moves up or down of at least 3% in four of the last 6 days. Wednesday’s violent rally was stopped right at the very round 13000 number, and I felt the key to tech was AMD getting above its very influential 100 number, which was support several times and now seems like a sturdy ceiling. That would have given the SOX a boost and we know they must participate in any tech rally. But we are far from that and catching knives is a dangerous game. Another name that gave some foreshadowing was ADBE which has recorded back-to-back nasty earnings reactions falling 10 and 9%. When dependable, mature companies like this are struggling it’s a time to be in plenty of cash. I laid out a possible scenario for tech below via the QQQ. But if it does not play out be very quick to cut losses with a 295 stop.