Yesterday's market action was positive.
The Nasdaq Composite fell 1.1% in extremely tame volume (Point A).
When volume is far below average, it means institutional investors are reluctant to sell. Yesterday's pullback was therefore healthy, normal and natural.
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.
The Nasdaq may have fallen 1.1% yesterday but from a technical perspective, it's now looking much better. Before yesterday's behavior, its handle was 'wedging up' instead of 'sloping down.'
But when you now look at its chart from a weekly view, you see it's built a very tight two week handle (Point B) which means it would not surprise me if next week we see a breakout attempt (Point C). For now, things continue to look good.
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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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