Yesterday's market action was neutral.
The Nasdaq Composite fell 1.01% in far above average trade, (Point A). This indicates aggressive institutional selling which weakens the market and makes it more prone to further falls.
Leading stocks action was positive. A higher number gained in above average volume compared to those that dropped in above average volume. When this happens on a market 'down' day, its known as a bullish divergence.
Yesterday was a strange one. The market fell on extremely heavy volume (a negative) and yet leading stocks on the whole acted very well (a positive). Ideally the market will shake off yesterday's peculiar drop with a strong response, helping it get back above its 50 day moving average (Point B).
However, because it is currently trading below its 50 day average, my eye is back on the thick band of support between 3000 and 3040 (Point C). Because of this latest behavior, I've shifted my stance back to neutral.
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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