Is Tech About to Break Down?

It’s been messy out there — and little by little, some key levels across risk assets are starting to get tested.

The Dollar Index is hovering around 100.

ARKK is on the verge of breaking below 70.

Small caps are testing their prior cycle highs.

These three levels could signal a major shift in market dynamics.

That raises the question: where will the next critical test appear?

Today, my focus is on a level that could be even more important — Technology.

This sector has been a cornerstone of the bull market. Strong tech leadership is exactly what signals a healthy, risk-on environment.

Which is why any signs of weakness here carry more weight.

If the sector that typically leads bull markets starts to break down, it raises serious questions about how sustainable the broader trend really is.

So here’s the level that matters:

135 on XLK.

That’s where the lower bound of the current range lines up with the VWAP from last year’s lows.

In other words, this is the line in the sand.

If this level holds, the bulls remain in control and this is just another consolidation within an ongoing uptrend.

But if it breaks, it’s not just a tech story anymore.

That’s when you start thinking bigger — about risk appetite, about leadership, and about whether this market is entering a more fragile phase.

Either way, this is one of the most important levels in the market right now.

And how price behaves here could go a long way in defining what comes next.

Steve and I covered key levels and setups in our Mid-Month Conference Call for ASC Premium members.

Members: watch the replay here.

Not a member? Join risk-free today to get full access.

Alfonso De Pablos, CMT

Director of Research, All Star Charts

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