MLR - PMP 5/23/14

Published : May 23 2014 at 9:33 ET

Major averages rose on mixed volume with the NASDAQ Composite closing above its 50-day moving average and the S&P 500 a breath away from all-time highs. That said, volume on the S&P 500 was lower. Nevertheless, we could be at the start of a lackluster QE-manipulated rally as we've seen many times before which creates a new uptrend as the S&P 500 hits new highs while the NASDAQ then catches up with the S&P 500. The former leading biotech group which then got pummeled under its 200-day moving average now rests above it, but is finding resistance at its 50-day moving average.

With a three-day holiday weekend looming ahead, the action will likely remain indecisive as trade slows. Outside of a handful of individual stocks that have been showing concretely constructive action and which we have reported on, such as Illumina (ILMN) and others, most former leading stocks are still deep down in their patterns and are nowhere near even "roundabout" type buy set-ups. Thus if the market's attempt at establishing a new rally phase is to succeed, it may take time in terms of individual stocks setting up in proper buy points. In the meantime, the jury is still out on the market's next clear trend.

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