Market Analysis and Summary
The major indexes finished higher across the board Friday, although their price action was mixed. The NASDAQ and Russell 2000 stalled at logical resistance and closed in the lower halves of their ranges for the day, which is indicative selling. Fortunately, volume declined which helps soften their weak closes. The S&P 500 and DOW on the other hand, reclaimed their 50-DMA’s as volume on the NYSE expanded and finished the session in the upper halves of their ranges for the day which is indicative of accumulation. An immediate recovery on heavy volume like this is exactly what you want to see following a sharp drop like we saw on Wednesday.
The market’s leading growth stocks rebounded with the market on Thursday and Friday, but finished the week in noticeably better shape. Very few if any big leaders dipped below their 50-DMA’s with the S&P 500, Russell 2000 and the DOW last week. Not to mention, some of the stronger leading names immediately recovered and closed at new all-time highs on Thursday.
The distribution count currently stands at 3 days on both the NASDAQ and NYSE which is very manageable. So, if leading growth stocks continue to hold up and exhibit this sort of strength and the major indexes persist constructively from here, we wouldn’t hesitate to buy leading stocks. However, having the patience and discipline to wait for a perfect setup, that you can but exactly right is critical.
The NASDAQ stalled at its 10-DMA and closed in the lower half of its range for the day, although volume declined which helps soften its weak close.
The Russell 2000 stalled just shy of its 50-DMA and closed in the lower half of its range for the day as volume declined.
The S&P 500 reclaimed its 50-DMA as volume on the NYSE expanded and finished the session in the upper half of its range for the day.
The DOW reclaimed its 50-DMA and finished the session in the upper half of its range for the day as volume declined.