Market Analysis and Summary
The major indexes all finished the session above their 50-DMA’s, near their highs for the day and slightly below recent all-time highs as volume expanded across the board, adding badly needed accumulation to both major indexes. The distribution count held steady at 7 days on the NASDAQ and 5 on the S&P 500. Don’t forget, prior to the November election, there were many times when the distribution count was a good bit higher and leadership was much narrower, yet the market managed to keep pushing higher.
Since then, the market’s leadership has broadened considerably and continues to act extremely well. Over the last month or so the general market has suffered a couple bouts of heavy volume selling, especially the tech laden NASDAQ. Fortunately, leading technology shares have been shaping shaping back up and there have been plenty of stocks in the medical/biotech sector, that have been building constructive bases and breaking out. Not to mention, the financial, residential building and building related stocks continue to act well.
As long as leading growth stocks continue to act well and the uptrend in the general market remains intact, we would continue to build long positions as entry point present themselves, however, slowly and with the utmost selectivity. As always, remember that “buying right” is critical, especially in the current, general market environment. 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 rose 0.27% on heavier volume and closed back above all of its moving averages, adding a badly needed accumulation day.
The Russell 2000 found support at its 50-DMA, bounced and ultimately finished the session up 0.33% and slightly below recent all-time highs, as volume expanded.
The S&P 500 found support at its 50-DMA, bounced and finished the session near its high for the day as volume on the NYSE expanded, which is still considered an accumulation day, despite closing a hair in the red.
The DOW shook out constructively below its short-term moving averages and ultimately finished the session near its high for the day and just slightly below recent all-time highs, despite closing flat on the day.