"Successful trading is about finding the rules that work and then sticking to those rules." — William O'Neil
It was another tough week, especially if you are a bullish growth investor. There were so many things that could have gone well, from positive earnings beats to the good economic news. But nothing, not even the over the top performance of Social Media stocks (Snap, Pinterest, Facebook , Twitter ) could hold up through the week.
There were certainly days that each sector had to shine, but as far as the week-to-date performance, there was not a lot of back and forth as the days progressed in the weekly list of sector winners/losers.
The market sold off heavily on Friday after a big day of earnings releases that did not meet the demands of investors who were already nervous from the resurging pandemic and the pending turmoil from next weeks election. There is not much to look at on the good side other than the pullbacks will eventually create new opportunities.
It was a reasonably good day following the sell-off on Wednesday. The Nasdaq finished up +1.64% after tempting itself with the 50d MA and September Resistance line. Volume was lower, returning to the recent levels that have represented the wait-and-see level of activity in the market, well below the 50d average volume .
The day was not so much of a surprise but still hurts for a bull in the market. Sure, there were hopes for a bounce off the 50d MA or bulls coming in at the end of the day to buy the dip. But none of that happened.
What does the Thrust mean? It is a leading indicator of a great bull run about to happen. There have only been 14 thrusts since 1945, but with an average of 24.6% gains in the next 11-12 months after the thrust! Great! So what’s the dark side?
The follow-up to a terrible Monday was an inside day with gains in the Nasdaq while the rest of the market continued to melt down among mixed signals from a positive Durable Goods report, but an unexpected dip in Consumer Confidence.
Well, crap. Welcome to Monday. News over the weekend reset expectations coming into the morning, but there was still hope that support would firm up and it initially did that as the market opened, coming close to Friday’s high. Then the reversal, 30 minutes into trading, came after New Home Sales data disappointed and it was a long slide from there.
The Nasdaq Week in Review is my weekend homework where I look over what happened in the previous week and what might come in the next week. It helps me evaluate my observations, recognize new data points, and make a plan for possible scenarios in the near future.
One more day of reversals to close a choppy week. Every day this week had a morning move that reversed once or more by close. Earlier in the week it was higher highs that reversed to lower lows. At the end of the week, it was lows that reversed to close with gains.
