A chink in the armor but can't get a flesh wound
The Nasdaq fell for thee days coming into today. On Thursday last week, the 50 day MA was busted and there were lower lows and closes on Monday and Tuesday. The low yesterday sniffed the 100 day MA at 6164. Today the open gapped higher, and the index is trading back above the broken 50 day MA at 6273.32. For the Nasdaq, the price has not closed below its 100 day MA since November of 2016. In 2017, the price has close below the 50 day MA only ten days.
For the S&P index, it fell to a low of 2417.35 yesterday when the 100 day MA was at 2417.80. So officially, the price broke below the 100 day MA by $0.45. That was the first look below the 100 day MA since November 2016. However, the index could not close below the MA line. Today the price gapped higher and it too is trading now above its 50 day MA at 2450.29 (trading at 2452.39). A close above would be more bullish.
There is a lot of chatter about how the market is overpriced. The VIX moved up to 16, but is back down to 11.57 today. There is generally less confidence in Washington, but today they talk about tax reform.
Through it all, the stocks just can't sell off much.
The S&P fell about 3% from the August peak to trough.
The Nasdaq fell about 4.3% from the peak to the trough.
Maybe the momentum higher is slowing. Maybe there are chinks in the armor of the indices, but there is no flesh wounds. The technical bias is simply not showing much negativity. The bulls remain more in control.
