Yesterday's market action was positive.
The Nasdaq Composite gained 0.54% in below average volume making back most of its previous day's loss (Point A).
Yesterday I said: 'To shift me back to a bullish short-term stance, the Nasdaq would have to rise today and make back yesterday's losses' which is exactly what it did.
Leading stocks action was positive.
Yesterday's bullish behavior, helped the Nasdaq to continue to work on the handle it started to build on the 20th August (Point B). From here it may continue to work on its handle and shuffle sideways, but with the handle now being one week old, it means we may soon see the Nasdaq make another attempt to break through the resistance at 3085 (Point C).
The 600 lost ground this week and underperformed. Selling volume was tame (Point D) which means institutional investors weren't running for the exits.
The Nasdaq Composite did much better. It closed the week very 'tight' helping it to build a bullish handle (Point E) which often turn out to be precursors to powerful breakouts. For example look at the one it built back in Oct 2010 (Point F) and look at what happened after it (Point G).
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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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