Major averages finished yesterday mixed on lower, below average volume with small caps continuing to lead. There was a notable divergence between big caps as shown by the NASDAQ-100 down -0.59% compared to the small cap Russell 2000 which finished higher by +1.13%.
Crude oil continued higher as well nearly reaching $38 a barrel. Leading stocks are starting to materialize though the process has been slow. Indeed, the market seems more tentative with each passing day. The question is whether oil which has strongly correlated with stocks since the start of the year can continue to bounce.
Within the context of the prior move off of the February lows, a pullback here is not out of the question. It then becomes a matter of watching just how far such a pullback carries, and whether or not it indicates a potential rally failure. The 50-day moving average for both the NASDAQ Composite and the S&P 500 therefore represents key support on any continued pullback off their recent peaks.
Futures are currently lower by about half a percent.
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