— John Rothe, CMT (@JohnRothe) August 11, 2023
Today’s Chart of the Day was shared by John Rothe (@JohnRothe). Technology ($XLK) was the weakest sector today and this week. It was the strongest sector in the first half of the year, gaining 40%, and it broke out to all-time highs last month. However, it’s back below the former highs after pulling back 7.4% recently. This qualifies as a failed breakdown for the Tech sector. As you might know, failed breakouts are often followed by sharp moves lower. John points out that $XLK could correct another 8-10% from here before reaching support at the August 2022 highs, around $151. This is an issue for the major indices in the near term, as Tech represents 27% of the S&P 500 and nearly 50% of the Nasdaq.