Yesterday's market action was neutral.
The Nasdaq Composite edged up 0.15% in heavy volume (Point A). Just like the previous day, with the gain being small and volume being inflated, it tells me that the bulls and bears are fighting it out for control of market direction and that we could be at a turning point. It was also good to see the Nasdaq find support for a third day in a row at its 200 day moving average (Point B).
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.
Today is going to be a tough one for the markets and the support at the Nasdaq's 200 day average line is likely to get broken. After hours, tech giant Apple disappointed the street and fell 4%. With Apple being such a huge influence on the market, today could get ugly. It will be interesting to see how the market responds to Apple's negative news and whether the institutions use it as a buying opportunity.
It's also reassuring to know that the Nasdaq has solid support between its 200 day moving average and 2942 (Point C). It also provides me with comfort to know that October is almost behind us and the three strongest market months, November, December and January are rapidly approaching.
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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