The technology sector performance still poses a risk to the market and can trigger another sell-off if some key resistance levels are not violated in the next few trading sessions.
The S&P 500 Index has rallied above its 30-day moving average after finding support at its 50-day moving average, causing euphoria to those who pay attention to these technical levels and skepticism to those who do not care about them.
This index is now about 10 points away from horizontal resistance at 1,471. However, the NASDAQ-100 index has not performed as well due to weakness in the technology sector:
A test of the 50-day moving average failed yesterday, causing some of those who pay attention to these levels to overlook the fact. This index is of course below its 30-day moving average and inside a falling channel that cannot be called a flag except on a rainy day. The next couple of trading sessions will be critical as continuing weakness in the technology sector has the potential of pulling the broader market down and causing a resumption of the correction.
A very short note to trend-followers: take a break. This is a market for very short-term bots.