The news of the week has been the orchestrated revealing of the Trump tax plan, with Congressional and Administration spokespeople hailing historical tax reform. That has helped to drive a move to new highs by the various major market indexes, including the NYSE Composite and Russell 2000 Indexes.
The NASDAQ Composite Index powered to a new all-time high on Friday on slightly higher volume. This defies the abnormal and abrupt sell-offs on heavy volume that we saw in a broad swath of leading NASDAQ names Monday. That day shows up on the chart below as a high-volume crack in the index down to the 50-day moving average.
As I wrote on Wednesday, the index action didn’t look bearish at that time in the least, and Friday’s breakout underscores that utter lack of bearishness in the index charts. Now that we’re at new highs again in 2017, the question is whether it meets up with some selling resistance as other such moves have this year. This sort of phenomenon of selling into new highs is what has generated the wildly choppy action of the indexes since June.
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