We sent out a private note to our subscribers last Thursday stating that the NASDAQ index has experienced three distribution days so far. Last Friday the NASDAQ also had a sizable selloff but with a light volume, therefore last Friday was not a distribution day. And amazingly the low of last Friday stopped right above a critical swing low.
Last Monday the NASDAQ had a sizable momentum reversal on the downside. The following four trading days had very choppy indecisive rotations while certain speculative vaccine stocks were trading on high momentum and the stay home leading stocks such as AMZN and NFLX suffered badly to form a temporary top.
Last week the S&P 500 and Dow were trading sideways and slowly grinding higher while the NASDAQ was strongly trending higher and closed at a fresh all time high. Last Monday we sent out an email alerting the cycle inversion and the impact of the presidential election to the stock market.
The market did manage to pop up a four-day rally before the 4th of July holiday in spite of the the rising COVID-19 2nd wave. We anticipated the possibility in our last blog, as long as the S&P 500 index held 2965.66 level, the market would rally. Last Monday the market made an effort at open to take down the target, but failed.
