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Global technology ETF and mutual funds had $3.768 bln worth of inflows last week, according to Goldman Sachs. From a contrarian perspective, this is particularly negative in the short-term. Adding to worries, the Nasdaq 100 is led by the strong performance of just a few stocks and is now in overbought territory, looking at the Relative Strength Indicator. 

Fundamentals for technology names continue to strengthen amid continued weak expectations and depressed levels of investor positioning. While Tesla took a hit as it told investors it will forgo profitability for greater market shares, IBM reported strong earnings. In semis, TSMC said it believes it is passing through the bottom of the cycle in the second quarter and its business in the second half of this year should be stronger. Keep an eye out for next week's most important earnings for US Big Tech.

While the US economy is finally seeing 'cracks' in its jobs picture, US Treasury yields continue to react downwards as traders forecast the weakening US economy will see lower interest rates. This downtrend in yields should act as support for valuations, particularly in technology names. On the earnings front in tech, Q1 earnings in 3 weeks should be decisive, but really the news flow continues to be encouraging. Should there be a more 'material' drop in markets, tech should be better able to withstand it. Investors should be eying to buy dips and look for Big Tech names that are still lagging but are showing encouraging signs (Google, Amazon). This post is written for an educational purpose of the Trading Game, and does not constitute financial advice.

The Nasdaq is holding steady ahead of a key US jobs market report with the unemployment rates and Nonfarm Payrolls. A weaker jobs market could be positive for stocks as traders assess the likelihood of a Fed 'pivot'. 

Markets are buoyant with recovering risk sentiment since Fed Chair Powell's speech last night in which he emphasized the Fed will be careful not to overtighten and will likely slow down the pace of rate hikes. US PCE, the Fed's favorite gauge of inflation came softer than expected, increasing the likelihood that the Fed will 'pivot' sooner than later, given the recent data that points towards a decelerating pace of inflation.