A rush of tech earnings this week has placed the Nasdaq 100 at a critical crossroads, Matt Maley said.
"Just recently the QQQ saw what's called an outside-down day, and that's when you get a higher high than the previous day's high, a lower low than the previous day's low, and a close below the previous day's low," he said Wednesday. "That may seem like something that may happen often but actually it doesn't and it usually shows a sign of exhaustion."
He also said it suggests that buyers have been tapped out and a short-term pullback of at least 3% or 4% could be on the horizon. "That doesn't mean that the group is topped out for a long-term disaster, but it does tell me that I think that investors don't want to chase these stocks up here and [investors should] let them come back down from their overbought technical position and come to you," said Maley.
Amazon, Apple and some other top stocks in the Nasdaq are in good shape for the long term even if they see a short-term pullback on earnings, says Michael Bapis, managing director at Vios Advisors at Rockefeller Capital Management. "Earnings have been reset. You're going to see probably one to two quarters of earnings that nobody can decide what it means," He said in the same interview. "You may see a small pullback like Matt mentioned possibly because it's run up so high and the market has run up pretty quickly off its lows.
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