The release of the Fed meeting minutes today set the market on fire, sending the Dow Jones Industrials Index up over 300 points on the day. But it didn’t take too long for the fire hoses to come out, and the fire was quickly put out. By the close, The Dow had pulled a big outside reversal to the downside on higher volume as it failed at its 50-dma. This would appear to be the end of the line for the sharp reaction rally that began two Fridays ago.
While the S&P 500 Index looks very much like the Dow, the NASDAQ Composite Index, which has led the rally off the lows over the past eight trading days, stalled and reversed from a higher high today on increased volume. Today’s action capped off three days of stalling around the highs, but the index remains above its 50-dma. With the S&P and the Dow now back below their 50-dmas, I give the NASDAQ reasonable odds of doing the same.
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