Market Analysis (04 May’21)

Technology and other growth stocks stumbled Tuesday, coming under pressure after a run that has pushed major indexes to repeated records.

Nasdaq vs Dow Jones

While Nasdaq has been under heavy distribution today, the Dow Jones index has barely moved. This suggests that the ongoing market weakness is primarily driven by the rotation out of tech stocks and does not indicate (at least just yet) that the market has reached its ultimate top.

In any case, a much broader market sell off can be expected only if all four indices go into the distribution mode. For Dow Jones index it means that the price should drop and close below its short-term support at 33600 (see chart below).

Dow Jones, 1h

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