S&P and Nasdaq Move Towards ABC Correction
Indices gapped lower in what's evolving into an ABC style correction; in essence, a zig-zag move lower with a projected target of the measured move of the initial decline. For the S&P, today's selling also registered as distirbution.
The Nasdaq has a measured move target of 10,000. Technicals are mostly negative with On-Balance-Volume clinging on to its 'buy' trigger. Today's selling also undercut the 50-day MA with a gap lower. Buyers are unlikely to step in now, so until the index reaches a level attractive to buyers (hence the likelihood of an ABC correction) I will be looking for lower prices.
The S&P has also setup for a measured move lower. Today's losses took the index back to its 50-day MA, but the gap down and higher volume distribution sets this index up for more losses. Because of these losses, the index continues to underperform relative to the improving Russell 2000.---
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