The market has reached a chop zone where it has retraced roughly 50% of its sharp move up from the February 9th low, depending on which index you’re looking at. The NASDAQ Composite Index came close to retracing half of its prior rally, which by my reckoning would be down to the 7068 level. The index got as low as 7084.83 on Friday before rallying to close higher on lighter but at least above-average volume as it regained its 50-dma. We’ll now have a chance to see whether support at the 50-dma holds.
The S&P 500 Index retraced more than 50% of the prior rally, closing just below the mid-point between its January 26th high at 2872.87 and its February 9th low at 2532.69. Volume was lighter, and the index remains below its 50-dma. Both the S&P and the Dow have taken the brunt of the selling thanks to the Trump Administrations stated intention to impose steel and aluminum tariffs. Obviously, industries that use these metals, such as auto, machinery, oil services, infrastructure, etc. make up more of these indexes than they do the NASDAQ Composite, hence the reason for the S&P’s underperformance.
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