The Gilmo Report

November 4, 2018

November 3, 2018

The market remains in the fourth day of a nascent rally attempt off the lows of this past Monday. Friday’s action put an end to what was a three-day upside streak for the indexes, as an early-morning gap-up move reversed and sent all the major indexes into the red. The NASDAQ Composite Index stalled and reversed at its 20-dema on higher and heavy selling volume.

 

GR110418-$COMPQ

 

The action was not very encouraging, especially since it centered around a gap-down break in big-stock NASDAQ tech leader Apple (AAPL) after it disappointed on earnings Thursday after the close. This triggered sharp selling in the futures after-hours on Thursday and overnight. However, an unsourced report from Bloomberg News that President Trump had asked officials in his administration to begin drafting a trade agreement with China sent the futures rocketing back to the upside ahead of the open.

An allegedly strong October jobs report an hour before the open didn’t add to the inspiration, however, as it only served to reinforce the idea of an aggressive Fed. So, by the open, the futures had backed down, and the NASDAQ 100 future had gone slightly negative when the bell rang. The NASDAQ Composite spent a brief period trading above the flat-line before rolling over and reversing back to the downside, where it spent most of the day, logging a distribution day within a four-day rally attempt off the Monday lows.

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