The oversold rally in beaten-down techs and other growth names continued into Friday after a strong jobs number of 228,000 was reported by the Bureau of Labor Statistics. All the major market indexes were up roughly a half percent on the day on light volume.
After a three-day rally, the NASDAQ Composite Index stalled off its intraday peak on Friday as buying interest waned. Most of the movement seemed to be driven by beaten-down NASDAQ leaders that were in oversold rally mode, and the action lacked conviction. By the close, the NASDAQ posted a stalling day after a strong opening gap-up to finish near the lows of its daily trading range.
The S&P 500 Index showed a little more enthusiasm as it posted a new all-time closing high. The Dow Jones Industrials and the NYSE Composite Indexes also posted new all-time closing highs. The enthusiasm was perhaps muted by the fact that volume was quite light. It appeared to be more a function of sellers taking the day off. Nevertheless, from an index point of view, the action can’t necessarily be seen as entirely negative as much as it was sleepy.
As always, it all boils down to what is going on with individual stocks, and as I see it the action can be classified as somewhat bifurcated. Those who try to make a blanket call that the market as a whole has topped for good are perhaps a bit premature. In my view, it’s a little more complicated than that.
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