The Gilmo Report

March 24, 2019

March 23, 2019

The action after the Fed policy announcement on Wednesday, where we saw the indexes initially rally and then reverse to give up most or all their gains, looked cautionary, as I noted in my report of that day. But that came with a one-day delay, as the indexes rallied sharply on Thursday. The NASDAQ 100 Index led the charge as money poured into big-stock NASDAQ names.

I also noted in the same report, that “In the past, when money has started to pile into NDX names as everything gets extended, it has marked at least a short-term peak {for the market].” One more day of piling into the big-stock NASDAQ names dragged everything higher on Thursday. The move was provided a strong impetus by a positively perceived earnings report from Micron Technology (MU), which is also a major NASDAQ 100 component.

This sent the semiconductors rocketing, which added even more fuel to Thursday’s big rally in the NASDAQ 100 and in turn the NASDAQ Composite Index. The indexes bolted to higher highs on increasing volume, looking as if a major upside move was in store. But the popcorn machine effect, as I call it, came into play on Friday.

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