Market Analysis and Summary
The major indexes have been a bit wild and choppy lately, yet they have managed to maintain a bullish undertone. The Russell 2000 pulled back to its 50-DMA over the last few sessions, but volume was below average and it still looks fine. Meanwhile, the NASDAQ, S&P 500 and DOW have all continued to hold up in a tight range, near recent all-time highs. Distribution remains at bay and there is a solid wall of worry, firmly in place.
The general market is in good shape and more importantly, it continues to be supported by a broad base of high quality, leading growth stocks, building constructive bases and breaking out. Hence, the line of least resistance remains higher. So, continue to initiate long positions as entry points develop and as always, be very selective and have the discipline to wait for the perfect setup. Waiting to enter a position at the “optimal spot,” is often the difference between getting shaken out, or not.
The NASDAQ found support above its 10-DMA, bounced and then closed in the black, near its high for the day and only slightly below all-time highs. Volume declined, but finished 10% above average.
The Russell 2000 found support at its 50-DMA, bounced and closed near its high for the day as volume expanded. This is a sign of strength and support at this level.
The S&P 500 shook out constructively below its 4-EMA and 10-DMA, as volume on the NYSE expanded. It finished the session in the black, near its high for the day and only slightly below all-time highs, which is constructive.
The DOW shook out constructively below its 4-EMA and 10-DMA, as volume declined.