All the major market indexes, apart from the NASDAQ Composite Index and its close relative, the NASDAQ 100, have been living like homeless indexes underneath the “freeway overpass” of their 50-day moving averages. The NASDAQ, which has been able to find support along its 50-day line earlier this week, didn’t show much in the way of sustainable strength today, however.
After an initial upside romp, earlier in the day, the NASDAQ reversed to close near its lows for the day on higher trading volume. This has the look of churning and stalling on higher volume. In my view this is simply another form of distribution.
The S&P 500 Index has made several runs at its 50-day moving average over the past week, but to no avail. Today the index again ran up to its 50-day line before reversing to close in the red and near the intraday lows. Volume was higher in a clear distribution day.
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