Stocks finished near session lows as the Federal Reserve policy statement failed to inspire buyers. S&P 50 and NASDAQ ended the day near but off their lows. Small caps on the other hand finished much stronger. Volume on the NYSE slid on the day while NASDAQ volume came in higher. The bright spot on the day was certainly small caps and the NASDAQ was able to hold the 2200 level. While not an ideal day it was important to see the market hold in the face of selling pressure.
It is clear as day small caps are now back in favor with traders. The Russell 2000 closed nicely, but off its highs. We are certainly seeing plenty of small cap stocks move out of decent bases. Our only gripe is we are not coming out of a nice correction with beautiful chart setups. Deal with what is in front of you and we are.
Again, at high levels of distribution with the NASDAQ and S&P500. Both indexes have 6 distribution days and while under normal conditions this would be more than enough to tumble a rally. However, a normal market this is not! Volume and upward price momentum is what we need right now. It is important for the NASDAQ to hold the 2200 level and break into new highs. Our uptrend remains, but it certainly is on shaky ground. Keep your losses very small and look to take profits.
Perhaps we’ll get a better sense of a stronger trend tomorrow, but until then our uptrend remains.
