My last post referenced the NQ needed some follow-through above 12800... well we haven't gotten it.

The good news, so far we've created a higher low. The bad news, the longer it takes the more likely the level is to fail.

Back to my canary $OKTA, it seems to be holding the lower channel's midline with a series of higher lows. However, until it proves otherwise with some movement above the 9/21 EMAs, it's very bear flaggy.

The optimist in me wants to see tech move higher, but the cynic forces me to curb my enthusiasm. My expectation is for pops to continue to get sold into. When they don't we may be at the real reversal.

One more session remains in the week and four more in the month to give us more insight on where we go from here. Long term I remain bullish. In the short term until the market shows us a confirmation of direction, stay nimble, trade small, respect your stops and your profit triggers.

All my best,

Bags

As I mentioned in my memo Tuesday, the bulls need to see some follow-through.

That didn't happen with tech, but $SPY, $DIA and $IWM continued their moves to the upside.

As for tech, I look at $OKTA as a key to the sector because it is emblematic of junior tech. Notice where price was rejected? Right at the 9ema, even though it had a decent gain on the day.

While $QQQ did not have a cascade down, a rejection of the downtrend line and EMAs provided some slippage. The Qs are now sitting below the 9ema making the remainder of the week appear in peril.

Time will be needed to repair tech's fall off. Time will not resolve at the end of this week, nor will it provide a magical springboard. Monday's lows give traders something to shoot against but that level must hold or time will be reset.

Looking at the NQ I want to see closes above 12800 for me to feel eager to add to more longs in the sector.

Stay nimble or sit it out! 😂

Bags

I've previously mentioned at StockTwits and Charts for Charity that rotation back into tech has taken roughly 3 weeks to play out.

This week will be the end of week 3.

Tuesday along with Friday's price action is encouraging that we may have found or are finding a short-term bottom. Bulls will need follow-through Wednesday and the rest of the week for this to be the case.

There are still lots of oversold names in tech that either rejected their key EMAs, or are still below.

The group I look at most, FMAGA, should begin to show signs of turning before the majority of junior tech. $FB closed above daily 50ema and above all key EMAs. $MSFT never lost 50, and now above 21ema. $AMZN reclaimed 9ema, above all EMAs. $GOOGL +50ema, regained 21ema, just below 9ema. $AAPL rejected 9ema.

Obviously, most of the damage was done to $QQQ, which closed below 9ema and needs to repair (TIME). $SPY (chart) and $IWM (chart) rejected their downtrend line, but above all key EMAs.

Bulls must follow through. Or Tuesday, like Friday, was a sell-the-rip day.