Time for Tech and MedTech to Back Up Their Big Talk

As we know, the relief rally since Christmas has largely centered around software strength as well as some M&A deals in biotechnology and overall strength in quite a few segments of healthcare and medical technology (medtech). 

At the moment, we have both the QQQ (large cap tech) and IWM (small caps) back above their 50-day simple moving averages, albeit off session highs, but the DIA (Dow) and SPY (S&P) ETFs are not quite there yet. Without question, bulls would view tech and small caps in QQQ and IWM leading us higher as a good thing.

But they still must back up their big talk because we have now arrived at, well, a big level. It is one thing for a bull to feel better about oneself after a spirited relief rally in the wake of the rare December swoon we just saw. But it is quite another to be able to stave off bear attempts to reject us at some fairly obvious overhead potential resistance areas. 

To be sure, as bulls will argue, large cap banks rallying in light of their recent earnings, good or bad, is a promising sign indeed, be it BAC C GS JPM.

However, I suspect the Nasdaq is still too much of a market ringleader to ignore any weakness or meaningful reversal there, given how many hot software and medtech names are housed in that index. 

On the QQQ daily chart, updated below, this morning push over the 50-day m.a. (dark blue line) is getting bulls excited, though closing and holding above it would be all the more impressive. 

The bottom line is that I am still holding several long into this bounce, selectively trimming where I can and not abandoning ship at the first sight of a fade. However, it is worth repeating that the major index charts are still far from healed from the Q4 2018 damage, and pacing ourselves as traders is important.