Tech: Getting Closer to a Breakdown
This week, we have been tracking developments in the tech sector, specifically focusing on the divergence between the “Magnificent Seven” and the semiconductor industry.
Until yesterday, the Magnificent Seven ( $Apple(AAPL)$ $Microsoft(MSFT)$ $Amazon.com(AMZN)$ $NVIDIA(NVDA)$ $Tesla Motors(TSLA)$ $Alphabet(GOOG)$ $Meta Platforms, Inc.(META)$) had been cushioning a broader tech selloff, with bullish moves mitigating the decline in semiconductors ( $Micron Technology(MU)$ $Advanced Micro Devices(AMD)$ $Qualcomm(QCOM)$ $Broadcom(AVGO)$ $Taiwan Semiconductor Manufacturing(TSM)$ and others).
Today, some of the Magnificent Seven (GOOG, AMZN, NVDA, and META) surrendered their gains, while semiconductor stocks continued their downward trend.
As I highlighted last night for $VanEck Semiconductor ETF(SMH)$ , the loss of the 10-week moving average (10WMA) was significant. Furthermore, the loss of 598.8—the central weekly level—along with the considerable distance from the central monthly level, made 590 the key daily level needed to validate any potential bounce in this bearish environment.
Regarding the $S&P 500(.SPX)$ , I posted last night 7,560.3 as the central daily level for today (CDL), with 7,539 and 7,505 serving as the support levels below.
The price bounced this morning from the first support zone and then failed to hold the central daily level (CDL). With the temporary support at 7,539 fading, the next bearish target modeled last night was 7,505, and that level ended up to be the low of the day with precision.
The market closed in bearish mode, meaning the central daily level for Friday will act as resistance.
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