The major market indexes ended 2017 with a whimper, but the fact is that the overall action has been flat since the big gap-up move two Mondays ago. As the daily chart of the NASDAQ Composite Index illustrates, the past two weeks of holiday immersed trading have been nothing but one big gap-fill.
In the process, the NASDAQ Composite on Friday scored its lowest close of the holiday season and a distribution day, dropping below its 10-dma on surprisingly higher trade. This was also a big outside reversal to the downside. As it turned out, a slow start to the trading week was more a sign of a market losing energy rather than saving up its energy for a final push into the end of the year.
The year-end downdraft on Friday was led by the by the NASDAQ 100 and small-cap Russell 2000 Indexes. The gap-up move to all-time highs two Mondays ago is now starting to look like a bit of an exhaustion gap as the index goes into a shallow, eight-day downtrend. So much for the holiday spirit.
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