Thursday's Market Minute: Tech Teetering As Rally Slows

Tech stocks are once again leading the way in equity markets, as Nasdaq-100 futures posted their fourth straight green day yesterday for a more than 3% gain this week. However, the contract is on the verge of a bearish MACD crossover. This suggests the recent uptrend that blasted the /NQ up over 35% since the lows in late March could be slowing while traders continue to digest whether another week of terrible economic data caused by Covid-19 has truly been priced in already.

It’s hard to picture a scenario where the tech rally crumbles and the rest of the market continues upward, so traders likely will be closely watching the next couple of trading days for the /NQ. A breakout above the previous high close from last week near 9120 could be encouraging for bulls, while the Linear Regression Line near 8820 could show support if the move fails to hold.

The other three major equity futures have looked softer compared to tech lately, particularly the Russell 2000 contract. Small-caps have long been the weakest of the bunch, but the /RTY managed to hold on to gains and bounced off its 50-day SMA on Monday. This 1220 to 1240 area will be important to watch, as it represents the last areas one might expect support near key moving averages, namely the 50-day SMA & the 21-day EMA.