The NASDAQ continues to trade below its 50-DMA and has been under heavy pressure since it followed through on 8/13. However, a break in either direction from here would not be at all surprising.
On one hand, President Trump could send the market into as tailspin with just one tweet. On the other hand, leading growth stocks remain in significantly better shape than the general market, which is the most important factor when is comes to the sustainability of an uptrend in the general market.
Nevertheless, until the headline risk and wild volatility abates, progress will likely continue to be difficult at best.
So, continue to keep track of the strongest stocks in the strongest groups, with the best fundamentals. However, until we start to see clear evidence of strength and accumulation on the major indexes, we would keep exposure to a bare minimum, if not 100% cash.
The NASDAQ has continued to trade below its 50-DMA since it followed through on 8/13 and the distribution days are piling up, which does not bode well for its current rally attempt.
The Russell 2000 has been living below its long-term 200-DMA since the NASDAQ followed through and continues to be contained by its 23-EMA on the upside.
The S&P 500 has continued to trade below its 50-DMA since the NASDAQ followed through on 8/13 and the distribution days are piling up, which is not constructive.
The DOW has been meandering sideways in a wide range for about a month, finding support at its 200-DMA and resistance at its 50-DMA/65-EMA, unable to find any direction.
Buy MTH on a big volume move through $65.86, with a sell stop at its 23-EMA. (Price Alert: $65.86)