Software Not Pulling Its Weight:
There has been a heavy anchor within technology, an already fragile group. Obviously, I am referring to the software space. On a YTD basis, it is lower by 35% and the IGV almost retested the lows of the 10/13 big reversal candle on 11/4, whereas the SMH lifted strongly off that same mid-October low. That was a sign of weakness in software. The group has been bloated with a plethora of new issues over the years many of which have been unprofitable and that action is coming home to roost. But truth be told the largest holding within the ETF in MSFT was flirting with a bullish inverse head and shoulders pattern and the break above on 11/30 which rose 6% in huge trade has now for the most part disintegrated. The 2nd and 3rd largest holdings in ADBE and CRM are both more than 50% off their 52-week highs as well. The IGV is lower 10 of the last 17 weeks and all 10 decliners fell at least 3.5% and CLOSED at or very close to the lows for the WEEKLY range. If tech is going to rebound this group has to show better. The ratio chart versus the SMH shows the semis doing all the heavy lifting and in this fragile environment, it is just not enough.