Tech Earnings in Focus

Alright well the markets rebounded some of the selloff from yesterday and today we await the all important earnings reports from the following tech giants. With that lets take a look at the MEGA8s Tracker settles from yesterday and please note as of this update the QQQ 525C is this weeks hedge:

This was a nice bounce but in all honesty we believe the pressure is still on and this weeks earnings will either provide support to the bulls cause or if anyone of these corps. disappoint then we would believe a longer term top is forming. We know the technical levels in the Nasdaq futures to watch and we will not make any directional determination till these levels are closed upon on a weekly basis. As far as those levels, let’s look at the Nasdaq futures chart:

From this chart we can see that the bull/bear pivot remains at 21608. We would suspect mechanical and short term traders will use this level as their long/short bias. As far as the bigger weekly picture, as we stated, we will not make an opinion on a longer term directional change unless this trend channel is broken. One thing to note is we have consolidated around this pivot level for 9 weeks now. This gives us some very good information, first it tells us large institutions are selling this area and or diversifying out of the tech stocks into the broader market. Why do we say this, we say this because the price has not moved, it hasn’t moved besides billions of consistent retail inflows of buys via general buying and systematic and consistent longer term IRA, mutual fund and 401k flows. I think this reality is often overlooked and its important to determine and point it out that the equity markets always exhibit consistent buy flows and on a relative fixed basis. So when we see a flat line around a high point pivot, its pretty easy to determine that the large block institutional types are in there with strategic sell orders, disbursed at various points as to not be detected but rather disguised and rightfully so.