Yesterday's market action was neutral.
The Nasdaq did pull back and volume did come in above average, technically giving us a day of professional distribution.
That's not good but it also does not surprise me especially after the previous day's 2.5% gain.
Even though I believe the market is massively oversold and the recent trading activity has been panic, manic and irrational, what I don't believe is the market is going to shoot back up in a short space of time.
What is more likely to happen is what's known as the changing of the guard. When this occurs you often get one day up followed by one day down. This one day up and one day down cycle normally continues for sometime resulting in a sideways market. After the base is complete it is then ready for its next move, which could be either north or south.
India, Russia and global materials underperformed.
The best clue that all remains well came from leading stocks. On a day when the Nasdaq ended the day in the red a massive 83% of leading stocks were heading higher on heavy volume. When this happens it is known as a bullish divergence.
For now staying calm remains the mantra of the day. Plus reminding oneself that you are a long-term investor and these recent losses are temporary.
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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