Yesterday's market action was neutral.
The Nasdaq Composite fell 1.95%, however the significant drop was tempered by extremely tame volume (Point A) indicating a reluctance to sell from institutional investors. On a fall of almost 2 per cent, you'd expect to see much higher volume. That could mean yesterday was nothing more than panic selling.
The S&P 600 dropped 1.6% also in below average volume (Point B) once again indicating that institutions did not want to sell stock.
Russia, India and global materials outperformed.
Leading stocks action was positive. Only one stock dropped in above average volume, a remarkable achievement on such a negative market day.
My short-term stance remains neutral. With investment fear rapidly increasing, I expect the Nasdaq Composite to find support very soon.
If the market drops further, I expect to see support on the Nasdaq at 2800 (Point C) and further support at its 200 day moving average line (Point D).
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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