Selling continued today on high volume as the NASDAQ marked its second consecutive distribution day. The tech focused index closed at its 50 day moving average support which I noted yesterday as key support level should the long term support trendline fail. The S&P 500 meanwhile closed at its long term support trendline.
There are only three trading sessions left in the month which means the infamous 1st day of the month market surge is just around the corner. Investors have been relying on this and psychologically the bears have an opportunity to make some headway if next Tuesday were to close in the red.
With so many bulls thinking this is the best opportunity in months to accumulate more shares, it will be interesting to see their reaction if the market fails to rally and starts making lower lows. And who can blame them, every pullback over the last year has turned out to be another false alarm and the market simply marched on.
My stance remains in these times that “cash is king” until new found strength is displayed. The discipline to take profits off the table, raise stops on remaining positions, and step aside only clears the head and makes the decision process easier.
Updated charts are below. Stay frosty out there.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
