Market Analysis and Summary
The major indexes all finished the session slightly lower Friday, as volume picked up across the board. Neither the NASDAQ or S&P 500 fell enough to meet the definition of distribution. However, the major indexes all flashed negative reversals on heavy volume, a sign that we may see some follow-on selling, at least in the short-term. Regardless, the major indexes have made significant progress higher over the last couple weeks and are entitled to a breather.
Leading growth stocks are in good shape. Breadth remains robust and there currently aren’t any leading groups flashing major warning signals. As we discussed in the last report, the line of least resistance is clearly higher. So, continue to initiate long positions as entry points develop and as always, be very selective and have the discipline to “buy right.” Remember, “buying right” is your number one defense. So, pay close attention to the action of the leaders and make sure your alerts are set and ready to go.
The NASDAQ fell a scant 0.02% on Friday, but its negative reversal on heavier volume is still indicative of distribution.
The Russell 2000 fell 1.18% on heavier volume, but finished the session above logical support and its short-term moving averages.
The S&P 500 fell 0.19% as volume on the NYSE expanded, which technically does not meet the definition of distribution. However, its negative reversal on heavier volume, still suggests some professional selling under the hood.
The DOW fell 0.19% as volume expanded, but finished the session above its short-term 4-EMA.