Yesterday's market action was negative.
The Nasdaq Composite bearishly reversed its intraday gains and ended the day down 0.7%. Volume came in above average (Point A).
The S&P 600 had a rough one and is also looking weak. Yesterday it dropped 1.9% on very heavy volume (Point B).
Previous to yesterday's negative behavior, the market had been acting well. Yesterday however was clearly a day of distribution and when institutional investors sell, it makes the market weaker and prone to further falls. Due to this I've changed my short-term stance to neutral.
Leading stocks action was positive. An almost equal amount gained in heavy volume versus those that fell in heavy volume. On a market down day, that should be seen as positive behaviour.
It's now looking more likely that the market is going to either head south or shuffle sideways. Of course the landscape could change very quickly if today we see some strength re-injected. It's worth pointing out that below where the market is currently trading, there is a thick band of support that starts at 2726 and finishes at 2883. This wall should help the market stabilise if it falls further (Point E).
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