Yesterday's market action was neutral.
The market continues to try to find a floor. The Nasdaq Composite gained 0.4% in heavy volume after bullishly reversing earlier session losses.
That means the Nasdaq has now had two institutional buying days in the last three trading days, helping to inject strength back into the market.
Russia, global materials and India all underperformed.
Leading stocks behavior was positive. I noticed that some leading stocks followed through, a very encouraging sign.
For now the Nasdaq appears to have a lot of support just above its 200 day moving average. 2800 is also proving to be a place that institutional investors are using to load up on stock.
As I mentioned yesterday, it looks to me like we are currently going through a process called 'changing of the guard.' Put simply, it's when you see a transfer of power from one group of investors to another and in this case, the transfer of power is from the bears back to the bulls.
When this occurs, the market can have an up day followed by a down day followed by another up day and so on. This zig-zag movement continues until a new trend begins either to the upside or downside. My take is that the next trend will be upwards and if the market can follow through over the next few days, it may start heading higher sooner than we think.
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