The indexes have spent the past two days consolidating their recent gains. This is consistent with the NASDAQ Composite Index at least pausing as it runs into a logical line of resistance at its 50-dma. Whether this sets up a general market move higher or whether we see a deeper pullback and retest of the Christmas Eve lows is still an open question yet to be answered.
However, the tight sideways action with Friday’s price range narrowing sharply while volume declines looks constructive. So, we might look for the index to push through the 50-dma in the coming days if this type of constructive consolidation continues.
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