Market summary 14/7/23
After enjoying a string of robust gains, the market seemed to take a necessary breather. Both the QQQ and S&P 500 ended just slightly lower, despite a broader downturn in most stocks. Specifically, 71% of Nasdaq and 76% of NYSE stocks dipped today, casting a stark contrast to the relative tranquillity of the QQQ and S&P 500. Despite this majority decline, net highs persisted across both exchanges, and the percentage of stocks above their 5-day average dropped to a more moderate level of ~55%. There was a pronounced reversal, notably in the JNK ETF, which, while disappointing, is comprehensible following five days of appreciable gains.
Today's trading underscored the pitfalls of blindly pursuing market strength. While aggressive buying during a bullish phase may induce a sense of triumph, the subsequent hangover can often be hard to bear. The extraordinary bull market of 2020, characterized by its significant scale and breadth within a short span, was an anomaly. Most bull markets manifest at a more leisurely pace, prompting investors to exercise caution not just in what and when they buy, but crucially in the volume of their purchases. The forthcoming days will offer critical insights as a healthy bull market is marked by its capacity to retain gains rather than relinquishing them all. Hence, market pullbacks often serve as key indicators of overall market health.
Today's trading underscored the pitfalls of blindly pursuing market strength. While aggressive buying during a bullish phase may induce a sense of triumph, the subsequent hangover can often be hard to bear. The extraordinary bull market of 2020, characterized by its significant scale and breadth within a short span, was an anomaly. Most bull markets manifest at a more leisurely pace, prompting investors to exercise caution not just in what and when they buy, but crucially in the volume of their purchases. The forthcoming days will offer critical insights as a healthy bull market is marked by its capacity to retain gains rather than relinquishing them all. Hence, market pullbacks often serve as key indicators of overall market health.
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