"Just a few days into earnings season it’s apparent that we’ve got a strong one here. That doesn’t mean that every day we’re going to be rocketing higher.” – Dave Bartosiak in yesterday’s Surprise Trader. Those words certainly rang true on Thursday as stocks took a decisive step back in what has otherwise been a pretty positive first week of earnings season. The major indices each came off their lows of the day but still finished in the red. The NASDAQ had the sharpest pullback of 0.78% to 7238.1 on a bad day for chip stocks. The S&P was off 0.57% to 2693.1 and the Dow declined 0.34% to 24,664.9. Each of these indices are still up for the week and go into Friday’s session with a chance to put together a second straight week in positive territory. The big trouble on Thursday came from the semiconductor space, which has been one of the market’s strongest performers for a while now. Taiwan Semiconductor warned of weak demand for smartphones and issued a second-quarter revenue guidance that was well below market expectations. The market immediately connected this news with Apple, since TSM gets about 20% of its revenue from the iPhone maker. Shares of Taiwan Semiconductor were down 5.7% today while Apple was off a little more than 2.8%. Much of the technology space followed these stocks lower in the session. We’ll have to see in the coming days if this is a problem or a buying opportunity. “I’m not sure what to make of today’s selloff. But I’m not that worried about it right now. The 50-day moving average should be an area of support, so let’s hope it holds and we can finish off the week on a positive note,” said Jeremy Mullin in Counterstrike. Today's Portfolio Highlights: Technology Innovators: With the market looking a lot better these days despite today’s drop, Brian Bolan wants to fill up the portfolio for the rest of earnings season. On Thursday he picked up Axon Enterprises (AAXN), which you may remember better by its former name of TASER. These days, the company is also putting a lot of focus on body cameras and the storage of their data. It appears to be paying off as AAXN reported a strong quarter, including a solid beat and good guidance. Read the complete commentary for a lot more on this new addition. Income Investor: "On Thursday, a few companies weighed on the indexes causing their peers to fall as well. Specifically, Taiwan Semiconductor who missed earnings estimates and issued downsized guidance due to declining smartphone chip demand. "This news caused the semiconductor segment to take a big hit, mostly due to iPhone weakness; surprisingly several tech stocks with less than 5% exposure to Apple fell more than 5%. "This seemed like an overreaction to me, and later in the day several analysts came to that conclusion as well. These analysts stated that this dip in the semiconductor segment was a new buying opportunity." -- Brian Hamilton Surprise Trader: “Yesterday I warned about us becoming a little too complacent during the start of earnings season. The reports had been solid and up until now, pretty much everything was rocking and rolling. Today we got our first taste of volatility as lowered guidance from Taiwan Semiconductor sunk chip stocks across the board. That was enough to kick off selling in the NASDAQ which spilled on over to the rest of the market, making for a tough day. “It was a very choppy session as even the bears had a tough time hanging onto a trend. There was lots of back-and-forth action as the major market indexes flirted with breakouts and breakdowns only to find themselves retreating to the mean on multiple occasions. If you weren’t one of the lucky ones who got in on the action in the first hour or so of trading you spent the rest of the day wanting. “I suspect it will take some bullish reports out of the sector for these stocks to stage a rebound and bounce back. But given the good news from Mellanox met with selling, I suspect that traders are looking for reasons to sell this sector and will likely punish bad news. That should provide some fantastic buying opportunities for long-term bulls in this space.” – Dave Bartosiak, who also heads the Momentum Trader and Blockchain Innovators. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >> Zacks Investment Research