Tech Letdown:

We recently spoke about the importance of software to firm up, and with off-putting earnings reactions from some of the largest names such as ORCL and the WEEKLY chart below of ADBE, it looks like they may not hold up their end of the bargain to keep technology afloat. The semiconductors continue to demonstrate weakness, and now the WEEKLY IGV cup with handle we wondered about is now for naut. This week the ETF fell 3.3%, its largest WEEKLY loss in 6 months, and last week recorded a bearish engulfing candle. Perhaps the doji candle the week ending 7/28 should have been more of a clue as to impending weakness. Heading into next week it is only INTU above its 50-day SMA among the top 5 holdings, with CRM not finding any comfort after filling in the gap from the 8/30 session. NOW and PANW are holding somewhat firmly and perhaps they will be ones to watch once the group can turn around. It may seem tempting to buy names that display relative strength in a weak group, but eventually, they come to get them all. It is best to wait for the actual rebound to commence.

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