Market Analysis and Summary
The NASDAQ and S&P 500 have yet to resolve the divergence that has existed between them since 9/9/16, when these indexes gapped down and dipped sharply below their key 50-DMA’s on heavy volume. The NASDAQ almost immediately reclaimed this key moving average and has continued to make progress higher since, whereas the S&P 500 failed to reclaim its 50-DMA on each of its attempts and continues to to struggle below. The current distribution count stands at 4 days on the NASDAQ and 7 on the S&P 500, which is on the high side.
Nevertheless, leading growth stocks have continued to march to the beat of their own drum. As long as healthy rotation continues to take place and the market’s leadership remains broad and robust, we would continue to buy high quality, leading growth stocks as entry points present themselves. And as always, hone in on the best of the best, wait for exact entry points, maintain tight sell stops, take profits in extended names and eliminate laggards. That way, you are well positioned for future volatility, no matter the direction.
The NASDAQ bounced off its 21-DMA and finished the session in the upper half of its range for the day, despite closing 0.27% lower on slightly less volume.
The Russell 2000 fell 0.78% as volume declined and finished the session below its 50-DMA, however slightly.
The S&P 500 fell 0.33% as volume on the NYSE expanded and finished the session below its 50-DMA, adding a 7th day of distribution to its count.
The DOW fell 0.15% as volume declined and finished the session below its 50-DMA, although it closed in the upper half of its range for the day, which points to subtle accumulation.