Powell torpedoed the market today. After opening flat Powell’s testimony caused the major averages to sell off into the close, with all the major averages finishing at their intraday trading lows. The losses were significant and across the board. The COMPQ and the NDX fell 1.25% and 1.22% respectively. The SPX declined 1.53%. Volume was mixed. It fell on the New York and rose on the Nasd. This produced a new distribution day on the Nasd averages. Leading stocks held up better than the overall market with the leaders index gaining .22% on the day. The index closed in the lower half of its trading range on lower and below average volume. Powell came out today and was very hawkish. He said inflation and the economy have not subsided much and that interest rates would go higher than expected and for longer than expected. The market sold off and didn’t recover by the end of trading. The futures are now showing a high probably of a 50 basis point hike at the next Fed meeting and the market is pricing in the higher rates. The SPX fell back below its 50dma, which is negative. On the other hand leading stocks are acting pretty well , as can be seen in the chart of the leaders index. I am positive on the market in the intermediate to longer term, but it look like there will be some choppy action in the near term. Jerry
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