Major averages closed yesterday near the highs of their trading ranges on mixed volume. While the Dow failed to hit 20,000 once again after getting to within 13 points of this much hyped price level, the NASDAQ Composite posted a new closing high.
The VIX is testing lows not seen since last July 2014 while the DJIA is just a heartbeat away from 20,000. Back in March 1999 when the Dow went through 10,000 by more than just a point, it had a high volume reversal that same day then corrected -4.6% over the next couple of days.
The news reported that the reason behind the selloff was weakness in tech stocks. That said, this seemed to be more of an alibi used to justify the market pullback. In other words, the news will always find a reason for market action whether it's true or not.
With the Dow almost at 20,000, institutions could use that level as a way to unload unwanted stock which could cause a high volume reversal, at least for a couple of days. Keep a close eye on market action as it unfolds.
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