Market Analysis and Summary
The NASDAQ and S&P 500 have been struggling at their 50-DMA’s over the last couple sessions. They both finished yesterday’s session slightly below this key moving average, although the NASDAQ held up noticeably better than the S&P 500. Volume expanded across the board, adding a 6th day of distribution the S&P 500, while the NASDAQ held steady at 9.
Fortunately, the action from leading growth stocks continues to paint a very different picture than that of the major market indexes. Despite a high distribution count and what could easily be perceived as weakness on the major indexes, there is a broad base of market leadership acting very well.
For example, newer names like AKCA, PETQ and SHOP from the last couple reports, have all triggered entry areas and continue to exhibit strength. Also, there are plenty more leading stocks forming constructive bases, from which new breakouts may soon occur. So, as long as the market’s leadership continues to act well and the uptrend in the general market remains intact, it’s okay to continue 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 held up in a tight range as volume expanded and finished the session ever so slightly below its 50-DMA.
The Russell 2000 continued to rise over the prior two sessions, however slightly and continues to trade below its long-term 200-DMA.
The S&P 500 stalled at its 50-DMA and closed down 0.21% as volume on the NYSE expanded, adding its 6th distribution day.
The DOW stalled at its 10-DMA and finished the session 0.13% lower as volume expanded, but continues to trade comfortably above its 50-DMA.