Yesterday's market action was neutral.
The Nasdaq Composite gained 0.66% in below average trade (Point A) helping to end its six day run of losses. Below average volume on a market up day means institutional investors are reluctant to buy. The good news however is that there does seem to be some support at the 3040 level (Point B). I'm also pleased the financial media have 'flipped back' to being bearish. In my mind that's very good.
Leading stocks action was negative. A higher number fell in above average volume compared to those that gained in above average volume. When this happens on a market 'up' day, it's known as a bearish divergence. However many top stocks continue to act well on and around their 50 day moving averages, which is a big positive.
The support that I'd been expecting may have started to arrive yesterday but it's still too early to tell. I expect more support from institutional investors over the coming days and I also expect volume to pick up to the upside. But should the market fall further, I'd like to see a lot of aggressive buying between 3000 and 3040 (Point C).
Please note past performance should not be used as a guide to future performance, which is not guaranteed. Investing in 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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