The Gilmo Report

March 28, 2018

March 28, 2018

I told members over the weekend to fasten their seatbelts in preparation for the new trading week, but a neck brace might have also been appropriate given the extreme whiplash action we’ve seen over the past three days. News over the weekend that China and the U.S. were conducting talks to settle their trade differences sent the market rocketing on Monday. But the rally wasn’t entirely unexpected given the S&P 500 Index’s position at the 200-dma, which it closed right at on Friday.

What was unexpected was the sheer velocity of the upside move, resulting in the Dow Jones Industrials Index posting its third-largest one-day point gain in its history on Monday. Meanwhile, the NASDAQ Composite Index led with a 3.26% gain, helped along by torrid moves in big-stock NASDAQ names.  But all of that dissipated into the close yesterday as the indexes busted loose on the downside, giving up all or most of Monday’s gains.

The NASDAQ looked the ugliest, but not by much, posting a big outside reversal that gave up all of Monday’s gains and more. Today, the index whipped around some more before closing at a lower low on higher volume. Right here you’re more or less in no-man’s land, but on balance the action this week has added another bearish brush stroke to the market canvas.

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