Karpel’s Corner: Will Tech Break Bad?

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The two-sided trade started with the break of the Small Caps ($IWM), then the Large Caps ($SPY). Now we wait on the last man standing, Tech ($QQQ).

The $QQQs are holding at $94. A break would make it a challenge to get to ~$91, however. This would be the proverbial last shoe to drop for the overall market, so I want to watch every rally closely. Any bounce on light volume might be the shorting opportunity that a bear is looking for, especially if tech is not leading the advance.

If there are any catalysts for the tech segment, it would be the Semis ($XME and $XSD).

On June 25th we put on a bullish pick in $MU, which rallied into July but has subsequently pulled back and is under pressure. A break in this semi’s name would flag more potential weakness in the sector.

We have been bearish on Consumer Discretionary names ($XLY) of  late. This sentiment’s been confirmed by the performance of the market of late, so take a look at our Bearish Picks under the Tollbox on the right-hand corner of the Tradespoon home page.

Lastly, check out our new Tradespoon Live TV show every Monday at 11:00 am CST. In it, special guest Joe Cusick from TradingBlock and myself talk about upcoming events in the next week that could move market, break down trades that have been recent picks, and more. It is a great way to start your trading week!

Go to http://www.tradespoon.com/video/ to watch the webcast.

See you next time at the Corner!