TECH STOCKS LEAD MARKET LOWER -- TECH SPDR TESTS ITS 50-DAY AVERAGE -- SEMICONDUCTORS LOSE 50-DAY SUPPORT

NASDAQ BACKS OFF FROM PREVIOUS HIGH... Chart 1 shows the recent rally in the Nasdaq Composite  meeting new selling near its mid-February peak which was the first warning that its uptrend might be losing upside momentum (red line).   Today's lower gap confirms the idea that a short-term top has been seen.    The COMPQ is also threatening its 50-day moving average and potential chart support along its mid-March high near 13600 (green line).  That's a pretty important test for it and the rest of the market.   Although all of the major stock indexes are trading lower today, the heaviest selling is being seen in technology shares which are the day's weakest sector.

TECHNOLOGY SPDR ALSO TESTS ITS 50-DAY LINE... Chart 2 shows the Technology Sector SPDR (XLK) also testing its 50-day average and potential chart support along its mid-March high.   Today's drop is closely correlated with the Nasdaq Composite in Chart 1.   There again, that 's an important test of potential support.  Failure to hold there would signal a much deeper pullback.   Semiconductors are also coming under heavy selling pressure.

SEMICONDUCTORS LOSE 50-DAY SUPPORT... Chart 3 shows the VanEck Vectors Semiconductor ETF (SMH) falling below its 50-day line and its mid-March high. And that's after failing to clear its February high.  It's also falling on heavier trading which is a negative sign.   That raises the possibility of a further drop toward its March lows.