The Nasdaq 100 (NDX) had another low volume down day today and is in the process of working off an overbought condition. Because volume was slightly higher than yesterday, (but well under the 50 day average), today was a minor distribution day. It still looks like there are not many sellers… just fewer buyers. Price bounced off the 1:1 descending Gann angle but looks set to break through after it regroups.
The Nasdaq Advance-Decline metric shows the 10 day moving average is back to neutral while the 5 dma is in negative territory. I would not expect more than another day or two of this correction. Note that while the breadth is backing off, the volume is so light that no real damage is done. So far, this is a perfect retrace after a strong thrust.
The McClellan Oscillator is still overbought and may take a few days for it to back off enough to break through the resistance from the 1:1 angle on the NDX chart.
Charts courtesy of Stockcharts.com
Tags: Advance-Decline · Distribution Day · Gann Angle Fan · Market Internals · McClellan Index · Nasdaq Charts · Square of Range · VolumeNo Comments
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