The Gilmo Report

July 22, 2018

July 21, 2018

The major indexes have struggled to make further upside progress after clearing to new highs last week. As I wrote on Wednesday, I believe that the fat part of the index rally in terms of catching high time-value trades on U&R long set-ups has passed, and that this sets the stage for a possible market pullback. The optimal point at which we saw these U&R set-ups materialize occurred at the point of impact when the NASDAQ Composite Index bounced off its 50-dma in late June.

After breaking out to an all-time high on Tuesday, the NASDAQ has stalled and churned over the past three days with volume picking up relative to Tuesday’s new-high breakout day. So far, the new high has produced nothing in the way of significant upside follow-through. This is why the action feels a bit sluggish to me. To some extent, the index may be on hold as it awaits earnings reports from several big-stock tech names this coming week, including Amazon.com (AMZN), Facebook (FB), and Alphabet (GOOGL).

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