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NASDAQ 100 Breaks Trend Line

Looking at the chart above (courtesy of Chris Schumacher at The Street.Com) the NASDAQ 100 have clearly broken down and are correcting. They have broken through their uptrend line and appear to be headed to support established earlier this year.

We should be seeing a turn around based upon the fundamentals and the seasonally strong time for tech stocks. However, investors are working out the subprime lending mess and the stocks that get sold first are generally the most aggressive ones, which tech fits into.

The strategy for a situation like this is to hold on for the ride, don’t commit new money unless there is something specific at a certain company the presents a compelling reason to buy. The subprime mess will likely work itself out one way or another. We just have to hope that it is a short-term problem and doesn’t turn into a long drawn out ordeal.

Mark