Yesterday's market action was negative.
The Nasdaq Composite bearishly reversed its intraday gains and ended the day down 1.36%. Volume came in far above average (Point A).
The S&P 600 also had a rough ride dropping 1.44% on heavy volume (Point B).
Previous to yesterday's negative behaviour, 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.
If the market does continue to drop, ideally I'd like to see some support at the Nasdaq's previous cup with-with-handle breakout point around the 3100 level (Point C), failing that its next level of support is it's 50 day moving average (Point D).
Leading stocks action was negative.
With the action we saw yesterday its now looking more likely that the market is going to either pullback further or shuffle sideways. Of course the landscape could change very quickly if over the next few days we see some strength re-injected, but as always we play the market one day at a time.
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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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