The market spent the first two days of the week flopping around, with a logical bounce off the 50-dma from the Dow Jones Industrials Index providing the context for a rally off the early-morning lows on Monday. That led to a big gap-up move on Tuesday, for reasons that seemed unclear to me. As I noted in yesterday’s GVR, the un-inverting of the yield curve was cited as one reason, and Fed heads talking about lowering interest rates as another.
The net effect was a big gap-up rally that fizzled, with the indexes giving up a large chunk of their intraday gains. The NASDAQ 100 Index kissed negative territory as the closing bell approached, but a burst of buying in the last few minutes pushed the indexes back up off their intraday lows. Nevertheless, the stalling action on higher volume struck me as somewhat bearish.
That was confirmed to some degree today as the NASDAQ Composite Index, along with the S&P 500 Index, posted a distribution day today, selling off -0.63% on higher volume. Tech names took a lot of heat today, and many clouds, semiconductors, and others on my long watch list were down sharply on heavy selling volume.
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