Hmmm.
Last time a declining technology sector bounced hard, it staged that recovery after hitting the 50-day moving average.
Well, guess what? It’s back.
For example, Apple (AAPL), a critical bellwether stock in the sector closed today, September 17, at $110.34. The stock’s 50-day moving average stood at $110.36.
Coincidence? I don’ think so.
The tech-heavy NASDAQ 100 (^NDX in the Yahoo Finance ticker system) dropped 1.48% to 11080.95 at the close. That took the index slightly below the 50-day moving average at 11189.22 today.
One caveat–tomorrow, Friday, September 18, sees a lot of options expire, which always adds extra volatility to the market. That makes figuring out the trend and projecting which way prices will break tomorrow extremely difficult. The session is also a Friday, which normally means investors and traders will be squaring positions ahead of the weekend.
A bounce again, is, of course, possible.
But the weakness over the last week or so makes it possible that we’ll see prices break decisively below the 50-day moving average. Which would set stocks up for a further decline.
I would note that the CBOE S&P 500 Volatility Index (VIX), which had been falling lately, picked up 4.84% today to 27.30 at 2 p.m. New York time before falling back to a 1.61% gain to 26.46 at the close. An indication of a slight increase in worry but certainly nothing terribly convincing for tomorrow.
