The market has reached what I would call muddy waters here as the strong-thrusting v-shaped rally off the lows of over two weeks ago starts to lose momentum. Yesterday all the major market indexes posted losses of more than -1.2% on higher volume, and followed up with similar declines today. The NASDAQ Composite Index posted its third distribution day since jacking sharply off the February 9th lows. Note the cascading action off the peak over the past two days as volume has increased each day
The story is more or less the same for both S&P 500 and Dow Jones Industrials Indexes which also posted their third distribution days since the February 9th lows. However, a more bearish development for these NYSE-based indexes is the fact that both dropped back below their 50-dmas. So perhaps we’re going on a retest of the prior lows, and it is just a matter of seeing how low we go from here, if at all.
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