Summary
The stock market was smashed on Friday, August 1, with the S&P 500 (SPX) falling 1.6%, the S&P 100 dropping 1.8%, the Nasdaq giving back 2.2%, and the Nasdaq 100 declining 2%. The SPX had an extremely quiet July, without one day when the index moved 1% or more in either direction and with 10 all-time closing highs. Both the Nasdaq and the Nasdaq 100 (QQQ) had only a single 1% move in July. As such, in only one day, August lived up to its reputation as a volatile month. The SPX fell to trendline support off the lows since May 23 and bounced. But there was a bearish five- and 13-day exponential moving average (EMA) crossover. In addition, the index broke its 10- and 21-day EMAs, the first break of the rising 21-day EMA since 2/21. That break just happened to start the last correction in March (which ended in early April). But stocks bounced back on Monday, August 4, pretty much erasing the ugly losses from on Friday. For now, the Friday drop looks to be a one-day wonder to the downside — and not the beginning of a pullback. But we will see. The S&P 500 (SPX) and S&P 100 both popped 1.5%, so that resulted in two straight days with a price move of more than 1% for the two indices. The Nasdaq and the Nasdaq 100 each surged about 1.9%, their largest one-day gain since May 27. NYSE breadth had its best day since June 26. Ten of the 11 SPX sectors rose, with Information Technology, Communication Services, and Utilities ripping higher by 1.8% to 2%. Energy was the only loser. The SPX reversed the bearish five-day/13-day exponential moving average (EMA) crossover sell signal. The index broke back above its 21-day EMA. The 14-day relative strength index (RSI) was back above 50, the Vortex Indicat
