The NASDAQ bounced from support at 10500 level twice last Monday (9/21/2020) and Thursday (9/24/2020). Despite the continued choppy selloff in the NASDAQ since the September 2nd top, there are some amazing pockets of strength in individual stocks which led us to believe that pervasive fear is absent at the moment in the market.
Last week the three major indices made some small progress on the downside compared to the week before. Underneath the indices, there are some notable sector rotations going on. And more interestingly, there are several small cap genomic stocks breaking out which led us believe that this correction is a focused correction, not a universal selloff that drags down almost every single stock.
Last week the three indices made some progress on the downside, but it is a mixed picture with the NASDAQ leading the way down while the Dow and S&P 500 closed above their 50-day moving average. When we have a mixed picture like this, it is normally signifying buyers are present. Perhaps the latecomers who missed the party are buying value stocks now.
Finally the crazy NASDAQ momentum stocks took a break without any apparent catalysts last Thursday. Apple lost almost 20% in two days measured from high to low, but it was able to close off Friday’s low. The usual buying the dip crowd showed up again last Friday around 11 am when NASDAQ almost hit its 50-day moving average. Is the correction over?
