The NASDAQ and S&P 500 have continued to make healthy progress since the last report and the distribution count remains low at 3 days on both major indexes, which is considered low and not at all a concern.
Fortunately, the list of fundamentally sound market leaders, with accelerating EPS and sales growth, that are forming constructive bases continues to expand, which is the single most important factor when it comes to the sustainability of an uptrend.
However, extreme volatility has made progress difficult. So, be very selective and scale in, but only if progress is being made.
Always remember, “buying right” is our first line of defense and a major component of sound risk management, so remain disciplined and wait for perfect setups to emerge. Never chase!
The NASDAQ pulled back to its 50-DMA last Friday as volume swelled to well above average, largely due to quadruple witching.
The Russell 2000 drifted lower on light volume last week except for last Friday, which due to quadruple witching had a huge spike in volume, although it still finished just a tad below its short-term 10-DMA, where it continues to look healthy and constructive.
The S&P 500 pulled back as volume on the NYSE expanded to well above average, although unlike the NASDAQ, it held up well above its 50-DMA and closed only slightly below prior all-time highs.
The DOW fell 0.59% on heavier volume, closed near its low for the day and below its 10-DMA, although it is still holding up well above its 50-DMA in a healthy and constructive manner.