Markets overcame early weakness to begin the week as the Nasdaq was lower by nearly 1.5% in the early going before cutting that drop more than in half to end the session lower by .5%. The S&P 500 traded in a much more subdued manner, although it never saw green Monday, losing .3%. The Russell 2000 turned a lukewarm gain to a loss giving up .2% and following through lower following last Fridays bearish shooting star candle. On a longer term view the monthly chart shows excellent action following the bullish engulfing candle last November, which remember included a 14 day winning streak. Keep in mind the Russell and the financials tend to trade hand in hand as the benchmarks largest weighting is among the finnies. Regarding the Nasdaq we did mention just last week that it was nearly 300 handles above a nicely rising 50 day SMA and a test of that line could occur, of course we did not anticipate it being this quickly with forceful trade. Throughout 2017 that important line was touched in March and April and came very close in January and May and Monday recorded a good looking hammer candle coming within roughly 50 handles of its 50 day. Would it be this accurate after just a couple of days of selling? Time will tell. Of course healthy markets will be supported by a big contribution of technology and it reveals a risk on appetite, not the traditional commodity one, but gives investors a sense of buoyancy. Sure other sectors will pick up the slack as transports have done too, but I would like to see broad participation and I believe that tech will find its footing as resume its trend to the upside. It will serve traders best to see which names have held up best in this recent very volatile environment. Below is the chart of CDW and how it was profiled in our Thursday 6/8 Game Plan. Today it successfully retested a double bottom trigger and the round 60 number. So far so good.
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