Looking at the past four days price action, we might have seen stalling action, but not necessarily bearish action. Although the bears have had plenty of opportunity to get 'busy', they are currently sitting on the sidelines which is helping the bulls. But, there doesn't seem to be any buying occurring as we are stalled at the same price we were at 4 days ago.
One problem is that we closed under the price from the past few days and now we go home on a Friday with most longs that bought in a losing position. They will sit here all weekend and wonder if they made a mistake and if they should exit on Monday morning.
With that said, today's morning drop and afternoon bounce to recover most of the loss of the day was a healthy move scaring out the timid longs and putting in its' place stronger more bullish longs. The bounce off the 10 day moving average certainly was a bullish sign.
We have had a really strong run since the most recent swing bottom on 12/19 the Nasdaq has risen 7.9%, and it makes sense that we have a small correction of 2% - 4% before continuing upward. The market seems to be getting stronger and stronger (in the intermediate term) every day, and a small retracement would give it more strength to continue another leg up, so I am expecting it and actually hoping for it for the longer term trend in the market.
Except for the lack of price movement and volume, all internals are looking healthy and strong, but everything comes down to price and volume. So, we might have a few down days coming Monday, Tuesday, Wednesday, but hopefully this will simply be a buying opportunity and we will close the week flat with a stronger outlook for the coming weeks.
Have a great weekend.
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