Momentum Monday – Weak Financials, So-so Tech

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Bank stocks continue to show extreme weakness and pull the S&P 500 and Russell 2000 down with them. In the meantime, tech stocks are holding better than the rest. The Nasdaq 100 managed to hold above its 200-day moving average today. Above 176, it has the potential to test 180. Below 172, QQQ is likely to go to 168.

There are some major earnings reports this week: AMZN, MSFT, AMD, GOOGL, TWTR, INTC, etc. The market reaction to them will tell us a lot about the next direction of the Nasdaq 100.

Capital never sleeps. It has to go somewhere. Lately, that somewhere has been defensive sectors like consumer staples, utilities, and telecom. Those sectors don’t really inspire a lot of confidence – their upside is limited and during market liquidations, they go down with the rest of the market. In other words, those stocks don’t offer great risk/reward setups despite their charts looking relatively better than the rest.

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