Friday’s action had an odd odor to it, as the NASDAQ 100 and NASDAQ Composite Indexes were both hit with selling on lighter volume. The big-stock NASDAQ names, however, took the brunt of it as the NASDAQ 100 tanked -0.85% on the day. Meanwhile, in an interesting divergence, the S&P 500 and Dow Jones Industrials Indexes closed roughly flat, although both stalled and gave up on early rallies.
The S&P 500 Index doesn’t look all that much different from the NASDAQ as it also pulled into its 10-day moving average with volume declining. The Dow is, however, testing support at the 50-day moving average for the fourth time in the past three weeks. It closed up on Friday, along with the broader NYSE Composite, which was up 0.07%, and the small-cap Russell 2000, which was up 0.05%.
The divergences on Friday were a bit funky, to say the least, but in my view the breakdown in big-stock NASDAQ names could be telling if we also see the Dow bust support at the 50-day line in the coming days. As I’ve indicated previously in recent reports, this is a choppy market that lends itself more to an opportunistic swing-trading or tactical approach rather than a straight-forward investor’s approach where one builds positions in anticipation of an intermediate-term trend developing.
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