The Nasdaq Composite retreated more severely than the big cap indices on Friday with a loss of 0.8%. The index opened on its high for the day, but never ventured back to test the previous day's high above 2375.
One trading strategy that would have proven highly profitable with minimal risk would have been to go long the IWM and short SPY each time the IWM touched its 50-day EMA.
After such a one-sided market move yesterday, Clive Corcoran will adopt a cautious posture today, as many of the individual stock patterns look somewhat unorthodox and suspect.
The low for yesterday brought the S&P 500 into contact with the pivotal 1280 level, but it is doubtful that traders will be satisfied that this test was conclusive. We may see a more vigorous test later in the week.
Should we see a break below key trend-lines on the index charts, we will have to decipher whether this is a true shift or yet another trap for overly zealous short-sellers.
One of the notable characteristics that has been emerging from Clive Corcoran's recent stock scans is the number of stocks that have fallen below their 200-day moving average.
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