Market Analysis and Summary
The major indexes are at the point where they could still go either way. The NASDAQ fell 1.00% on heavier volume and added its 7th day of distribution. Yesterday was also its 5th consecutive day living under its 50-DMA. The S&P 500 joined the NASDAQ and closed slightly below its 50-DMA for the first time since 5/17/17, although volume on the NYSE declined, so distribution was avoided.
The Russell 2000 fell on heavier volume, but closed just barely above its 50-DMA. Meanwhile, while the DOW held up the best of the bunch and closed well above its 50-DMA.
In the land of leading stocks, healthy rotation amongst the leaders continues. Ideally, leading tech stocks will build new constructive bases, exactly like the financial and building stocks just did, while the market’s other leading groups run with the baton. Conversely, we could just as easily see the market’s other leading industry groups start to roll over and follow the tech sector lower.
Only time will tell. Until then, we would maintain a defensive posture and minimize exposure, while we wait to see how things shape up from here. Be prepared for the market to move in either direction.
The NASDAQ fell 01.00% on heavier volume, but halted its decline at logical support. Regardless, it finished the session at a lower low and near its low for the day, which is not constructive price action. Not to mention, yesterday was its 7th distribution day.
The Russell 2000 fell 1.36% on heavier volume, but found support at its 50-DMA.
The S&P 500 fell 0.94% and closed slightly below its 50-DMA, although volume on the NYSE declined and it held above its prior highs.
The DOW fell 0.74% and closed below its 21-DMA on heavier volume, but finished well above its 50-DMA and prior highs.