Despite Blowout Earnings, Tech Heads South

Traders often talk about a market’s action. This refers to how the market reacts to news.

• If there is good news and stocks move higher, that’s good or positive action.
• If there is good news and stocks are weak, that’s bad action.

That's the case with the technology sector.

So far, the earnings reports from the tech sector have been very strong. Companies have been beating estimates and raising guidance. Despite this, most of the stocks are down.

The Technology Select Sector SPDR Fund ETF XLK tracks the technology sector. It's trading lower today and has also broken its recent uptrend line. This bad action could signal trouble ahead.