Market Analysis and Summary
The major indexes all rallied and closed above their 50-DMA’s on Friday, except for the NASDAQ, which finished slightly below. Volume declined across the board, so the distribution count remains at 7 days on the NASDAQ and 5 on the S&P 500. The line of least resistance remains higher.
Leading growth stocks continued to act in a healthy and constructive manner. Not only did we see continued rotation into the market’s leading industry groups outside of technology. We are now starting to see some of the leading names inside the tech sector begin to firm up as well, some of which have become actionable now that they’ve had some time to consolidate.
If the overall health of leading growth stocks continues to improve and the market’s uptrend remains intact, we would begin to initiate long positions, however, slowly and with the utmost selectivity. As always, remember that “buying right” is critical, especially in the current, general market environment. 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.
The NASDAQ rose 1.04% on Friday, although volume declined and it closed below its 50-DMA.
The Russell 2000 found support at its 50-DMA, bounced and finished the session up 1.07%. Not to mention, it closed back above prior highs and not too far off recent all-time highs, although volume declined.
The S&P 500 found support at its 50-DMA, bounced and finished the session up 0.64%. However, short-term resistance remains at the confluence of its 10-DMA and declining tops trendline and volume on the NYSE declined.
The DOW rose 0.44% as volume declined, but finished the session back above its 4-EMA and slightly below recent all-time highs.