Yesterday's market action was positive.
The Nasdaq Composite added a further 0.7% to Monday's gain and with it closing the day almost at its high indicates the possibility of more upside to come. On the downside volume was below average which indicates a lack of institutional demand.
It was good to see the SMH (chip sector) getting a shot in the arm and rising almost 2% on above average volume. This is always a positive especially with chips being the heart and soul of the Nasdaq.
Global materials outperformed the market, India and Russia underperformed. Leading stocks behaviour was neutral.
Yesterday's positive behaviour has created the possibility that the sharp correction could be over or close to and that now the market is ready to move higher again. Ideally from this point I would like to see the Nasdaq making a play to get back above its previous support level at 2800.
If it managed to pull this off, it would give me more confirmation that the recent correction is over. However, if the market turns tail today and falls on heavy volume, it would confirm the market probably needs to go down further.
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