Modified Playtime for Bears

On the back of the Nasdaq Composite and the QQQ (ETF for the top 100 stocks in the Nasdaq, namely "FANG" types of names) running directly into their prior, respective March highs, if not overshooting them yesterday, we ought not be too surprised to see tech stocks now mostly experience some profit-taking and generally lagging the market this morning. 

The updated QQQ daily chart, below, illustrates the above points, with the initial supply from March coming into play here as the likes of FB come in. 

While bears may perceive this type of action as consistent with a market topping out, in reality we know tech had become rather hot in the short-term. As a result, a few days of tech resetting makes sense. 

But the larger issue for the market is whether underlying demand is so strong for equities as an asset class in general, that rotation keeps the indices afloat. Specifically, as we have been detailing in recent videos and blog posts here and for Members, the threat of the commodities, materials, restaurants, banks, and other assorted segments catching rotation to compensate for tech is one which can throw a wrench in any bear hopes for a June swoon. 

Given the strength in natural gas this morning, for example, a name like CHK is back in play as its long-term turnaround case strengthens for bulls.