Yesterday's market action was positive.
The Nasdaq Composite gained 0.38% in average trade, (Point A). This indicates a small level of institutional buying.
Leading stocks action was negative. A slighter higher number fell in above average volume compared to those that gained in above average volume. When this happens on a market 'up' day, its known as a bearish divergence. It was however encouraging to see market leader Apple jump 4% on above average volume.
My opinion remains the same - the market looks in a much worse state than it really is. My take is that the recent 5 week correction (Point B) is a temporary dip and will soon find a floor. As I mentioned in Saturday's DMU, right now the Nasdaq is trading in an area where there is a tremendous amount of support.
As well as the Nasdaq having strong support where it is now, it also has solid support at its 200 day moving average which is close to the 2965 level (Point C) and the wall of support extends even further, all the way down to 2942 (Point D). With yesterday being an 'up' day, it's time to start counting days. Hopefully, we will soon see a follow through, which will help confirm that we have finally found a bottom.
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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