Equities gapped lower yesterday and finished deeply in the red for the session, and we noticed a pick-up in volume in various products as well. We have spent some time in 2012 speaking about Technology, specifically PowerShares QQQ Trust (NasdaqGM: QQQ) which is heavily exposed to the tech sector, and the evident out-performance that the sector has displayed this year in comparison to the broad based S&P 500 Index.

QQQ year to date is up 13.85% versus the S&P 500 Index up 7.30%. This out-performance has largely been paced by Apple (NasdaqGS: AAPL) as well, as the equity is up an impressive 30.92% year to date and currently has about a 15% weighting in the Nasdaq 100. [Tech ETFs to Consider as Apple Breaks $500]

However, this relative outperformance has not necessarily existed over the past few sessions, as Techs, including AAPL, have basically been down in-line with the broader market. This potential “loss of leadership” could be cause for alarm in regards to the sustainability of a continued rally.

Our market technician David Chojnacki points out that near term technical support in the NDX (Nasdaq 100 Index) is 2582, and after a brief dip below this level yesterday, the index managed to finish higher at 2588 to close the session, largely on an intraday rebound in AAPL. Being a market cap weighted index, which is calculated by the stock price of an index component multiplied by the number of shares outstanding, there has been some criticism of the NDX that it is exposed to a “top heavy” quality in that as AAPL continues to rally and hit new highs, the stock will become an even greater weighting in the index and thus have undue influence in future price direction in the index itself.

To mitigate the potential “overweighting” exposure to AAPL, First Trust Nasdaq 100 Equal Weighted Index Fund (NasdaqGM: QQEW) delivers exposure to the index itself, but each equity component is equal weighted and rebalanced regularly so as to avoid any “skew” effect from one or more names running in one direction. Thus, current top holdings include Netflix (NasdaqGS: NFLX), Seagate Technology (NasdaqGS: STX), and Micron Technology (NasdaqGS: MU) for instance.