Recent weakness in shares of tech leviathan Apple (NasdaqGS: AAPL) has resulted in the Nasdaq-100 and ETFs pegged to the benchmark underperforming the broader market. Bulls are hoping Apple’s quarterly results after Tuesday’s closing bell can reverse the trend.

What should be concerning to bulls is the churning activity in the Nasdaq-100, which has been predominantly caused by the day to day action of AAPL, which currently has a 17.52% weighting in the index. AAPL had a rather rough week, closing narrowly above its 50 day moving average and touching its lowest levels since early March on several occasions.

Thus, even with a nice leg up last Friday in MSFT (+4.55% post earnings release), which is the second largest weighting in the NDX at a 9.28% weighting, the NDX failed to make any headway given AAPL’s weakness and closed barely above its 50 day moving average (official close was 2676.04 and the 50 day MA is currently 2674.56).

From a technical standpoint, we see support in the NDX between 2672-2675 as well as at 2662. On several internal notes to trading clients that we have disseminated since the beginning of April, we have pointed out the growing “overweight” to AAPL in the NDX and related ETFs such as the popular PowerShares QQQ (NasdaqGM: QQQ), and the simple fact that a market cap weighted index does not have the ability to “rebalance” exposure as one stock, in this case AAPL, seemingly climbs infinitely.

Now that AAPL has fallen rather sharply off of its recent highs (it traded as high as $644.00 in early April before closing at $572.98 on Friday), it is clear that selling pressure in AAPL itself has prevented the Technology heavy NDX from trending higher. We see this vulnerability as a major point of importance concerning the sustainability of a broad based equity rally heading into the summer because as we had noted during the first few months of this year in these recaps on many occasions, the relative strength leaders in the 2012 rally have been largely Technology and Financials.

Year to date, both sectors are still out-performing the S&P 500, as SPDR Financials (NYSEArca: XLF) has rallied 16.76% versus the S&P 500’s 9.92% return, while the Nasdaq 100 is up 17.64%. Speaking of Financials, XLF also flirted with its 50 day moving average on several occasions last week but found some support, and Friday’s weakness was largely due to a sell-off in BAC which was down 4.68% on a downgrade by an influential Street analyst, and is a 5.4% weighting in the S&P Financials index that XLF tracks.

From a fund flows standpoint, it does seem that there is some concern out there regarding the tech heavy Nasdaq, as QQQ led all ETFs in outflows via redemption activity, and lost about $1 billion in assets for the week. The small-cap iShares Russell 2000 (NYSEArca: IWM) followed, losing about $800 million in assets, and this could be a sign of institutional investors selling out of “higher beta” areas of the equity market and embracing a potentially more defensive posture. The iShares MSCI EAFE (NYSEArca: EFA) and SPDR S&P 500 (NYSEArca: SPY) also saw net outflows, losing $600 million and approximately $550 million collectively last week.