TECH STOCKS CONTINUE TO LEAD MARKET LOWER -- TECHNOLOGY SPDR SLIPS FURTHER BELOW ITS 200-DAY AVERAGE -- APPLE DROPS TOWARD ITS 200-DAY LINE AS MICROSOFT WEAKENS -- BROADCOM AND INTEL LEAD CHIP STOCKS SHARPLY LOWER -- S&P 500 IS BACK BELOW ITS 200-DAY LINE

TECHNOLOGY SPDR FALLS FURTHER BELOW ITS 200-DAY AVERAGE ... Technology stocks continue to lead the stock market lower today. The Technology Sector SPDR (XLK) fell back below its 200-day average on Friday, and is falling further below it today (Chart 1). To get an idea of how much the techs have fallen out of favor, the XLK/SPX relative strength ratio (top box) has fallen to the lowest level in six months. Chart 2 shows Apple (AAPL) down more than -4% and bearing down on its 200-day moving average (red line). That will be a big test for the market's biggest stock. Chart 3 shows Microsoft (MSFT) falling back below its 50-day average (blue line). While Chart 4 shows Intel (INTC) backing off from resistance at its 200-day average. Intel is one of the largest stocks in the semiconductor group which is having an especially bad day.

(click to view a live version of this chart)
Chart 1

(click to view a live version of this chart)
Chart 2

(click to view a live version of this chart)
Chart 3

(click to view a live version of this chart)
Chart 4

BROADCOM LEADS CHIPS LOWER ... As has been the case for more than a month, chip stocks are continuing to weigh heavily on the tech sector and the rest of the market. Chart 5 shows the PHLX Semiconductor iShares (SOXX) tumbling more than -4% today to end its recent rebound. The SOXX appears headed for a retest of its late October low. Chart 4 shows Intel dropping which is the second biggest stock in the SOXX (9%). Chart 6 shows Broadcom (AVGO) tumbling more than -6% today after being decisively rejected by its 50-day and 200-day moving averages. Broadcom is the biggest holding in the SOXX at 10%.

(click to view a live version of this chart)
Chart 5

(click to view a live version of this chart)
Chart 6

MAJOR STOCK INDEXES TRADE BELOW MOVING AVERAGE LINES... With tech stocks dropping so hard today, it's no surprise to see the Nasdaq leading the rest of the market lower. Chart 7 shows the Nasdaq Composite Index falling further below its 200 day average. Chart 8 shows the S&P 500 slipping below its 200-day line. And Chart 9 shows the Dow industrials falling below their 50-day average (blue line). All of which shows that investors are selling into the November rebound. Most stock sectors are falling today led by technology, financials, industrials, cyclicals, and communication. The only gainers are defensive consumer staples, utilities, and REITS. Global stocks may also be reacting negatively to today's upside breakout in the U.S. Dollar.

(click to view a live version of this chart)
Chart 7

(click to view a live version of this chart)
Chart 8

(click to view a live version of this chart)
Chart 9

DOLLAR HITS NEW HIGH AS EURO TUMBLES... The green weekly bars in Chart 10 show the Invesco U.S. Dollar Index ETF (UUP) climbing today to the highest level in eighteen months (green circle). The blue circle shows the the Euro falling to the lowest level over the same period. The rising dollar provides a headwind to large U.S. multinationals that depend heavily on selling exports to foreign countries. The breakdown in the euro reflects relative weakess in the eurozone. The rising dollar also reflects relative weakness in foreign economies which isn't a good sign for global stocks (including the U.S). That's especially true of emerging markets which have been leading the foreign stock retreat. The rising dollar also hurts stocks tied to falling commodity prices.

Chart 10