Tech heavyweights Facebook, Apple, Netflix, Amazon and Google parent Alphabet have an inordinately large weighting on the Nasdaq, so any change in their financial health has a disproportionate impact on the index, both bullish and bearish.
But is it fatal? Are tech ructions a precursor to another crash?
There are three defining features on the Nasdaq chart. All of them suggest that talk of a Tech Crash is unjustified.
The first defining feature seen on the weekly Nasdaq chart is the consistent trend strength shown by the Guppy Multiple Moving Average (GMMA) indicator. The indicator captures the thinking of investors and traders. Wide separation in the long-term group of averages confirms strong investor support for the trend. The consistent wide separation is a characteristic of the Nasdaq since late 2016.
The second feature is the degree of separation between the short-term and long-term GMMA. That is a measure of trend stability. The chart shows steady and consistent separation with trading activity having essentially no impact on underlying investor confidence.
The third feature is the simple — but effective — trend line. The line starts in the middle of 2016, it was briefly broken in April 2018, but, for the past few months, it has regained the role as a support feature for the rising trend.
None of those features suggests the probability of any change in trend. They all confirm a high probability the uptrend will continue. That combination of features suggests the Nasdaq could fall to below 7,400 and still actually remain in a strong uptrend.
In addition, there is no end of trend features on the chart: There is no evidence of a double top, a rounding top pattern or the development of a head and shoulders reversal pattern. Some may point to a Relative Strength Indicator divergence, but closer examination shows the RSI divergence signal has been generated multiple times since 2009 and has not led to a collapse of the Nasdaq uptrend.
Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders, which can be found at www.guppytraders.com. He is a regular guest on CNBC Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe. He is a special consultant to AxiCorp.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.