The Dow took a beating last week and the S&P got a good thump. Nasdaq bobbed and weaved and dodged the bulk of the pullback. Now the question becomes, is this an exhausted rally or is it just a minor reset?
Both the S&P and the NASDAQ are still near the top of their most recent range but the one to watch is the Dow. Take a look at how that played out on this chart:
(scroll down for the chart)
At the close on Friday, the Dow broke below the recent range and ran for support at the 100 day moving average. With futures this morning showing some optimism, it looks like we might bounce back from that drop.
Identifying momentum shifts and sorting out pull backs from reversals is a key part of keeping your likelihood of profit strong.
Lee Gettess does a great job of showing how to recognize if the momentum is running out of steam and getting exhausted.
Momentum Trading with Precision shows how to recognize which pattern is happening right now. Grab it here and make sure you are able to confirm the trend.
Keep learning and trade wisely,
Market Wealth Daily