At times this week, the Nasdaq has appeared to take its cue from the Dow, rallying or dropping based on movement in blue-chips. Today, though, there was a clear break, with the Dow on the plus side and Nasdaq holding lower through much of the session.

In recent trading, the Nasdaq was down 1.6% to 3875. The Dow was up 59 to 10,436

So what do our friends, the technical analysts, have to say about the markets? Let's check it out.

Bob Dickey, director of technical research with

Dain Rauscher Wessels

is mostly negative. In his daily piece, Dickey wrote that market internals are "weak, with the advance-declines for both the


and Nasdaq running pretty consistently negative in a market that is mostly struggling its way higher."

Dickey goes on to focus on the leaders of the recent rally, noting that "it is the select few especially the more speculative issues that are doing the moving." He notes that it is a similar trend to six months ago, when the market advanced on a narrow group of stocks but said that this time "it's even more narrow and likely much shorter in duration."

He concludes by indicating that the Fed meeting next week could ignite a more directional trend, though "with consensus leaning towards no change the market is setting up for a 'buy the rumor -- sell the news' pattern. A possible sharp rally over the next few days would then be suspect."

But taking a less negative approach was Dick Dickson, technical analyst with

Scott & Stringfellow

, who said the burden of proof was still with the bears. Dickson was focusing on the Nasdaq testing its breakout level at 3900, which it has dropped below on an intraday basis, though Dickson said he was still looking not only for confirmation on a closing basis, but also confirmation with substantial violation of the 3900 level.

Dickson said there is too much volatility in the Nasdaq for him to say that just a close below 3900 suggests a change in trend. And he's seen too many times where a trendline or other level is violated by a small amount and pops right back the next day. He said he tends to use a 3% violation to suggest a clean break, which in the Nasdaq's case would be around the 3800 level.

In addition, Dickson said that he was focused on volume. He said if the Nasdaq closed above 3900 with low volume of around 1 billion to 1.1 billion range would suggest the up move was intact. Heavy volume in the 1.5 billion to 1.6 billion range alongside a drop below 3900 would be considered negative, while something in the middle, around 1.3 billion he said, would be more negative than positive because you really want to see volume dry up on a test of support. Dickson also said he was not paying much attention to it being a summer Friday, when traders are more apt to break away early for the weekend.

10:41: Getting Slammed on Morgan Stanley, Lehman Comments

Investors apparently had not finished taking profits in tech names after yesterday's late selloff, and the way the market has been moving on momentum, it could get ugly quickly.


Nasdaq Composite Index was down 35, or 0.9%, at 3902. Internet Sector

index was off 24, or 2.8%, at 859.

(AMZN) - Get Report

was feeling the heat over some comments that

Morgan Stanley Dean Witter's

Mary Meeker made about the online retailer. It was down 7 19/64, or 17.4%, at 34 45/64.


caused some of the furor in the stock, initially reporting that Meeker made some comments with a tone that appeared "somewhat negative." The network then attempted to clarify that report, saying there was talk at Morgan Stanley that second and third quarter revenues could be light. It said that while Meeker was not changing her numbers on Amazon, there could be a "nominal miss" to her revenue estimate for the second quarter.

Meeker's office provided no clarification on the matter and attempts to reach a spokesperson at Morgan Stanley were unsuccessful.


Lehman Brothers

issued a report on the credit analysis of Amazon's convertible bonds, writing that from a bond perspective, the credit was "extremely weak and deteriorating."

Lehman analyst Ravi Suria wrote that "going into what is arguably its most challenging holiday season, we believe that the combination of negative cash flow, poor working capital management and high debt load in a hyper competitive environment will put the company under extremely high risk." He concluded that he did not believe that the risk in the credit was priced into the convertible bonds and recommended that investors "avoid the securities."

A Nasdaq trader said the Meeker comments seemed to be the biggest factor in Amazon's slide.


Credit Suisse First Boston

was speaking positively about both






. Those who doubt the power of


should note that the station had only mentioned the PurchasePro comments and it was faring much better than VerticalNet. PurchasePro was up 3 1/8, or 8%, at 41 11/16 while VerticalNet was down 2 3/8, or 5.3%, at 40 1/4.

Regarding PurchasePro, analyst Chris Vroom wrote that he expected big upside to the top-line estimate for the second quarter. He wrote that it was likely that the company would report 20% upside to his $6.6 million top-line revenue estimates and that the loss per share should be narrower than his 29-cent estimate "by an impressive margin." Note that First Boston has done underwriting for PurchasePro.

Vroom said he also expected VerticalNet to best his $41 million revenue estimate for its second quarter. He noted that VerticalNet's deal with


(MSFT) - Get Report

to deliver business-to-business e-commerce services and content to small- and medium-sized businesses was "enjoying great traction with storefronts rolling out faster than anticipated." First Boston has not done underwriting for VerticalNet.