Market Analysis and Summary
The major indexes gapped down and sold off on heavier volume across the board yesterday, adding distribution to the NASDAQ and S&P 500. This brings the count to 7 days on each major index.
Fortunately, most leading growth stocks held up surprisingly well, despite the heavy selling in the general market yesterday. Stocks exhibiting powerful relative strength on a weak day in the general market like yesterday should be noted, i.e. PETQ, CLDR and BZUN to name just a few.
The line of least resistance remains higher. So, as long as the market’s uptrend continues to be supported by a broad base of healthy leadership, it’s okay to build long positions as entry point present themselves, however, slowly and with the utmost selectivity. As always, remember that “buying right” is critical, especially when the general market starts to whip around and you’re trying not to get shaken out of a big leader. Don’t buy a stock more than 1-2% past its pivot point and make a habit of eliminating laggards and taking at least partial profits on extended names.
In a volatile post Labor Day session, the NASDAQ sold off on heavier volume, although it bounced at logical support, closed well off its lows and above its 10, 21 and 50-DMA’s.
The Russell 2000 stalled at its prior highs from 3/1/17 and closed back below its 50-DMA on heavier volume, although it found support at its prior highs from 12/9/16.
The S&P 500 sold off as volume on the NYSE expanded, but finished the session well off its lows, as well as above its 50 and 21-DMA’s.
The DOW sold off 1.07% on heavier volume yesterday, but found support at its 50-DMA and finished the session above.