Yesterday's market action was neutral.
The Nasdaq Composite bearishly reversed for the third time in the last six outings. Just like the previous two reversals, it appeared to be harmless. The US tech index shed 0.9% on below average volume; however the level of trade did increase slightly from the previous day making it a mild institutional selling day.
The S&P 600 unfortunately fell back through its 200 day moving average, dropping 1.4% for the day.
The chip sector failed to break back above its 200 day moving average.
India matched the market, global materials and Russia underperformed.
Even though the market fell; only a small number of leaders dropped in heavy volume.
Although the market pulled back, the markets character has not changed. For now the Nasdaq remains above the key level of 2800 and well above its 200 day moving average. The statement I made yesterday remains relevant: ''Let's remember that when the market corrects, it needs time to mend and this correction is no different. It will start building the right side of its present base when its good and ready and so it would not surprise me if we see the market moving sideways for a while before it starts heading back higher.''
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