News again kept the rally going on Thursday when it was reported that the U.S. and China would make yet another attempt at trade talks in the month of October. No mention was made of rescinding the current tariffs that are in effect, nor was there any mention of any major agreement or concessions ahead of these talks.
But it was enough to send the NASDAQ Composite, S&P 500, and Dow Indexes all gapping right through their 50-dmas on heavy volume Thursday. Like I wrote on Wednesday, with the worst of the trade news out, there was nothing to stop Wednesday’s rally, and Thursday’s rally was a variation on that theme.
The indexes ran out of gas on Friday as volume contracted and the market came in toward the close. For now, as long as the Big-Three major market indexes remain above their 50-dmas, the index action remains constructive. A reversal back through near-term support at the 50-dma would of course be a reference for a possible move back to the downside.
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