Is the rally simply taking a breather or are we about to breakout to the upside as Decision Point believes? Investor’s Business Daily, who correctly became cautious ahead of last year’s vicious downturn and then turned bullish early after the rally began, remains cautious on the rally – a change in their stance after being bullish until last month. They classify the recent action as an uptrend under pressure. Several distribution days in recent weeks have the rally on shaky footing.
Uptrend under pressure
4 for the Nasdaq, S&P 500
and NYSE composite, 3 for
the Dow in recent weeks
Friday’s action was none too impressive according to IBD. In fact, it might have been further reason for worry. Although broader market action remains somewhat discouraging, the Nasdaq has continued to show strength:
Despite qualifying as a day of accumulation, Friday’s session didn’t show the kind of action that inspires confidence. For one, the Nasdaq broke through the 2200 level for the
fifth time in recent weeks only to be slapped back down once again. On the plus side, though, the Nasdaq hasn’t had much trouble holding its 50-day moving average in recent weeks.