The Gilmo Report

March 5, 2017

March 5, 2017

Wednesday’s big gap-up move seemed to run out of gas on Thursday, as the Dow Jones Industrials Index pulled in about ½ of a percent on lighter volume. Within the context of where the Dow is trading currently, 100 points isn’t much on the chart. So far the Dow has been able to hold above the intraday lows of Wednesday’s gap-up price range with volume declining.

 

GR030517-$INDU

 

The NASDAQ Composite Index also failed to follow through on Wednesday’s big-volume gap-up move to all-time highs. It is interesting to note that a breakaway gap move on Wednesday didn’t lead to anything that I would consider breakaway action. Obviously, it was strong technical action, but as is often typical of the market, a big show of strength one day may not necessarily lead to a strong follow-up the next.

Meanwhile, the index backed down on Thursday and Friday to test the 10-day moving average and fill Wednesday’s gap. Volume was lighter, so the action looks reasonably benign.

 

GR030517-$COMPQ

 

There is the idea that the big market gap-up on Wednesday might have been indicative of a so-called “blow-off top.” That is certainly a possibility we should be open to, but the first clue of a so-called blow-off top would be in the action of individual stocks.

The rest of this report is available for Gilmo Report Members only.
The full report will be available 45 days after it is posted. For immediate access: login or subscribe

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2017 Gil Morales & Company, LLC. All rights reserved.