Playing a strong defense came in handy on Monday as the markets gapped down, sending the S&P 500 Index diving below its 50-dma at the open. Things got crazy today after the Fed raised interest rates by a quarter-point, triggering a sharp rally to the upside that gave out into the close as the major market indexes reversed to the downside. In the process, the S&P reversed into negative territory on higher volume.
The NASDAQ Composite meanwhile broke below its prior breakout point and tested its 50-dma on Monday. It rebounded off the line on an intraday basis, but hasn’t progressed much from there. Today the NASDAQ reversed back to the downside on higher volume for another distribution day. Obviously, a breach of the 50-dma would be the second bearish development coming on the heels of Monday’s breakout failure.
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