Yesterday's market action was positive.
After three days of straight gains, the Nasdaq Composite paused for breath, giving back 0.15% in above average volume (Point A).
Even though the indexes didn't really do that much, it was good to see the Nasdaq finding support at the 3000 level (Point B).
Leading stocks action was positive. A greater number of leaders were rising in heavy volume compared to those that were falling in heavy volume. When you see this happen on a market down day, it is classed as a bullish divergence.
It is too early to say but yesterday's behavior may have been the start of the Nasdaq building a handle which would mean moving sideways for a while. The US tech index has now completed a cup formation (Point C) and may now be ready to complete the pattern with a handle (Point D). On the other hand, it may surprise everybody and keep on moving higher and if it did this latest correction would soon be over (Point E).
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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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