I have written recently that I believe technology is the most over loved and over owned sector. This has negative intermediate term implications for the sector and we have already seen the technology sector start to underperform recently. People are interpreting the negative Cisco news to mean that a slowdown in technology spending is here. When combined with the fact that many are overweight technology this does not bode well for the sector.
This news is a gift for the bears as it hit the market in its most vulnerable spot. The bears would have likely been on the run today as the negative news flow from Europe subsided. Instead they have hit the bulls in their favorite sector. In the long run its a positive that the fluff is being taken out of technology. In the short run it means the bears might be entitled to another push lower.