The markets had a disappointing finish yesterday, giving back most of their intra-day gains in the last hour of trading. And this morning the market continued that reversal, opening modestly lower, but on a positive note have since bounced off of the daily lows by early afternoon. As for absolute levels, the S&P500 is holding up reasonably well, but sticking with the ongoing lagging theme, the NASDAQ retested its 50dma again and is less technically strong. From the price action of the indexes, it appears money managers are rotating out of the aggressive tech and small cap names and moving their money to more defensive sectors.
Given the lack of conviction by either bulls or bears, it is not surprising the indexes are continuing to churn sideways and breakouts either direction quickly lose steam. Both headlines and sentiment have been mixed preventing a more sustained move either direction. Maybe Friday’s employment numbers will be the catalyst that finally tips the scales one direction or the other.
KORS is adding on to yesterday’s strong move off of the 50dma. LULU is also exerting itself, powering to new highs today. LULU’s move doesn’t have the duration to qualify as a base and is simply a bounce off of the 50dma. The buy range for 50dma bounces are from the 50dma all the way up to 5% above the previous high. From that measure, both LULU and KORS are still in the buy range.