The NASDAQ Composite and S&P 500 Indexes have both spent the past four days somersaulting around their 50-day moving averages without getting anywhere. This comes on the heels of this past Tuesday’s big gap-up move that was also a logical reaction rally after the undercut of the prior week’s lows, as discussed in my Wednesday, mid-week report.
The NASDAQ has been somersaulting around its 50-day moving average like a gymnast on the uneven bars. Within the context of strong but perhaps “phoneyed-up” (to use a favorite term of Bill O’Neil’s) futures-led gap-up rally that started the day on Friday, the negative close that ended the week was bearish on its face.
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