Yesterday's market action was neutral.
Bolstered by Apple's earnings, the Nasdaq broke its five day losing streak, surging 2.3% in average volume.
This behavior indicates institutional buying and is constructive because it injects strength into the market making it more prone to rise. The big up move also helped the Nasdaq get back above the 3000 level and its all important 50 day moving average.
Industrial materials matched the market, India and Russia underperformed. Leading stocks action was mixed.
With the market being in a five week downtrend, I'd like to see a successful follow through in the next four to seven days. This would help confirm that the trend has changed from down to up. When a market is trending downwards, one big up day is not enough to change the trend. What's needed is a follow through day which is a day when one of the main indexes jumps over 1.7% on increased trading volume.
Hopefully this will occur sometime next week. The most successful follow throughs occur between days four to seven of a new attempted rally. Yesterday's up move was day one. That makes next Monday day four.
Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investing in the Funds should be considered a long-term investment. The value of the investment can go down as well as up and there is no guarantee that you will get back the amount you originally invested.
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