The market was due for a breather after its incredible three-week run that began in mid-June. On Monday and Tuesday, the market took that breather and recorded two consecutive Distribution Days as it declined on increasing volume both days.
Wednesday’s bounce-back attempt started off strong, but turned weak as the session went on. Despite finishing 0.5% higher, the NASDAQ closed in the lower half of its intraday range.
(Click on chart below to enlarge.)
There are two major opinions about the market right now. The bearish argument is that all the economic and political turmoil making headlines each day is just too great for this market to overcome. The bullish argument is that the market’s resilience in the face of such fear and worry shows just how optimistic major investors remain about the economy.
Of course, opinions are worthless. All that matters is what the market is ACTUALLY doing right now. And right now, we remain in an Uptrend.
While the double-shot of Distribution Days we experienced this week is not good news (and it’s definitely something we want to keep a close eye on), two days of pulling back is not a cause for panic.
Until we see evidence that the trend has shifted, we will continue to buy top-rated Darvas stocks that properly break out of sound bases.
What we will NOT do is chase any stock that doesn’t fit our technical and fundamental criteria for qualifying as the “best of the best.”
Currently, we’re seeing a very focused list of leading Darvas stocks and it’s imperative to concentrate solely on this exclusive list.