ClosingBasis

XLK - Tech Sector Rolling Over

Short
ClosingBasis Updated   
AMEX:XLK   SPDR Select Sector Fund - Technology
BREADTH
1. More and more stocks in the sector are going on Point & Figure sell signals showing supply is gaining control.
2. $VXN ( NDQ volatility ) is making higher lows despite higher highs in the Nasdaq.
3. The hourly chart is showing a rising wedge into the underside of the 20MA (120MA displayed).
PRICE
4. Tech has been running up against its weekly upper bollinger band for a couple of months now. The upward bursts are getting shorter and shorter.
5. Currently, price is experiencing very churny, choppy action, threatening to make 100% retracements to lows.
6. Stockcharts SCTR score (strength meter) is 46.4 indicating underperformance.
EXTRAS
7. The positive money flows from post-election hedging option decay has gone away with Jan OpEx.
8. Index iVol is pinned until Wed morning when the VIX futures contract rolls over. Then there is serious potential for an iVol bid up across the broad market.
Trade closed: stop reached:
A bunch of FAANG stocks jumped this morning. Earnings came out tues evening for NFLX, but not the others. Oh well, next trade.

WHAT CAN I LEARN FROM THIS ONE?
-perhaps I should wait for rising wedges to break down first before positioning since there is the potential to pop sharply higher when they do.
-even though the VXN was making higher lows, the candle yesterday was red and obviously rejected its 10 & 20 MA's.
-XLK hadn't actually made a 100% retracement to a low on the daily time frame. Obviously at this point, I should have viewed it has a consolidation and not a topping pattern.

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