Market Analysis and Summary
The major indexes gapped up powerfully at the open yesterday and rallied into the close. The NASDAQ reclaimed its 50-DMA on heavier volume, which was enough for IBD to shift their market outlook from “uptrend under pressure,’ to “uptrend resumes.” The S&P 500 also reclaimed its 50-DMA, but NYSE volume declined, taking the oomph out of its move back above this key moving average. The DOW, which found support at its 50-DMA over the prior two sessions, rallied 0.90% and closed just a hair shy of its 21-DMA. The Russell 2000 rallied with the rest of the bunch, but remains below its long-term 200-DMA. The distribution count stands unchanged at 9 days on the NASDAQ and 5 on the S&P 500.
Fortunately, a broad base of leading growth stocks continues to form constructive bases, some of which have already started to break out on heavy volume. As long as the market’s leadership continues to act well and the uptrend in the general market remains intact, it’s okay to begin building long positions as entry point present themselves, however, slowly and with the utmost selectivity.
As always, remember that “buying right” is critical, especially when the general market starts to whip around and you’re trying not to get shaken out of a big leader. Don’t buy a stock more than 1-2% past its pivot point and make a habit of eliminating laggards and taking at least partial profits on extended names.
The NASDAQ rallied 1.38% on heavier volume and reclaimed its 50-DMA.
The Russell 2000 rose 1.08%, although volume declined and it closed below its long-term 200-DMA for the 4th consecutive session.
The S&P 500 rallied 0.99% and reclaimed its 50-DMA, but volume on the NYSE declined, taking the oomph out of its rally.
The DOW rallied 0.90% and closed just a hair shy of its 21-DMA on declining volume.