It is finally Election Day! And the day brought the pleasant surprise of a positive expectation breaker for the Nasdaq. Yesterday’s trend lines and the indecisive candle pointed to losses for today, but it is good to be wrong sometimes. I set my expectations for the next day, but always be prepared for a break from those expectations, especially during these uncertain times.
The first day of November brought starts off with some more choppy market action as the Nasdaq started in positive, went negative and then back to positive by the end of the day. It was good that the index came up off afternoon lows, but it could just barely get back to the midpoint of the morning highs.
A review of what happened in October with the Nasdaq.
Using the indicator on the big four mega-caps over the past week, especially Friday, gives a clear view of the character of how each performed.
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?