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Market Sentiment (Stocks on NYSE, NASDAQ, AMEX)
Unchanged
254
Decliners
2999
Advancers
3288

June 27, 2016, 2:52 p.m. EDT

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About Kevin Marder

Kevin Marder is a guest columnist and a co-founder of MarketWatch. He is principal of Marder Investment Advisors Corp. and a contributor to The Gilmo Report. Previously, he served as chief market strategist for Ladenburg Thalmann Co. and developed institutional fixed-income risk management software for Capital Management Sciences.

/conga/trading-deck/bios/marder_kevin.html 173642
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By Kevin Marder

Historically, geopolitical events have proven to be buying opportunities for shares. There have been exceptions, for example, the 9/11 attacks which occurred in the middle of a bear market. The market tends to bottom when the least number of people expect it. It is safe to say that most believe lower prices are in store.

If the news this coming week is uniformly bad, watch to see what the reaction in the major averages is. And do not be surprised if the market ignores the bad news. This would be a first indication that perhaps the worst is behind it.

As always, the focus here will be on the price/volume behavior of the major averages and the action of the leading stocks. As for the former, the Nasdaq Composite will need to stage a positive test of the May 19 low, as shown in the chart below.

For a larger chart, please click here .

Chart created using TradeStation . ©TradeStation Technologies, 2001-2016. All rights reserved.

This means price would need to trough just above or just below the May 19 low. This would be a second indication that the worst is behind the market.

The third component of a low in the averages would relate to the action of the market's leadership. While equities have not been led by the growth sector for some time, a number of speculative growth titles have nonetheless broken out of bases in recent weeks and months.

The June 17 column included a list of 10 stocks that had recently done just that. As noted then, " Any shift in the speculative sentiment that may or may not occur may first be felt among speculative growth titles. For this reason, the key thing to watch for is the behavior of recent breakouts ."

Since then, three of the 10 have broken down — Adobe Systems /zigman2/quotes/200389143/composite ADBE -2.15%  , Cornerstone Ondemand /zigman2/quotes/201253732/composite CSOD +3.82% and Emergent Biosolutions /zigman2/quotes/204817890/composite EBS +4.23% . It will be important to watch the remaining seven as well as any other leadership names. This includes the few liquid glamours that are still holding up, e.g. Amazon.com /zigman2/quotes/210331248/composite AMZN -1.12% and Ulta Salon /zigman2/quotes/210513442/composite ULTA +0.68% .

For a larger chart, please click here .

Chart created using TradeStation . ©TradeStation Technologies, 2001-2016. All rights reserved.

For a larger chart, please click here .

Chart created using TradeStation . ©TradeStation Technologies, 2001-2016. All rights reserved.

Among the names, TAL Education Group is a Chinese provider of tutoring services to over two million students. During the February 2017 fiscal year, most analysts have a 4% rate of earnings growth penciled in, with another 43% on tap for the February 2018 year.

/zigman2/quotes/200389143/composite
US : U.S.: Nasdaq
$ 261.09
-5.75 -2.15%
Volume: 3.41M
Oct. 22, 2019 4:00p
P/E Ratio
46.34
Dividend Yield
N/A
Market Cap
$126.74 billion
Rev. per Employee
$445,024
loading...
/zigman2/quotes/201253732/composite
US : U.S.: Nasdaq
$ 56.57
+2.08 +3.82%
Volume: 2.34M
Oct. 22, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.43 billion
Rev. per Employee
$275,418
loading...
/zigman2/quotes/204817890/composite
US : U.S.: NYSE
$ 54.27
+2.20 +4.23%
Volume: 317,527
Oct. 22, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.80 billion
Rev. per Employee
$458,886
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 1,765.73
-19.93 -1.12%
Volume: 2.23M
Oct. 22, 2019 4:00p
P/E Ratio
73.26
Dividend Yield
N/A
Market Cap
$873.43 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/210513442/composite
US : U.S.: Nasdaq
$ 236.91
+1.61 +0.68%
Volume: 1.00M
Oct. 22, 2019 4:00p
P/E Ratio
20.06
Dividend Yield
N/A
Market Cap
$13.94 billion
Rev. per Employee
$193,562
loading...
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