The market has had a difficult couple of days. After a mild pullback yesterday in anticipation of the earnings reports the market sold off hard today on disappointing news. The major averages opened lower on poorly received earnings reports but held to moderate losses until Powell spoke. All the major averages sold off into the close and finished at their intraday trading lows. The Nasd averages led the way down with the COMPQ and the NDX falling 2.23% and 1.94% respectively. The SPX lost 1.61%. Volume was higher across the board, producing new distribution on all the major averages. Leading stocks were lower as well with the leaders index declining 1.81% on the day. The index closed in the lower half of its trading range on lower but well above average volume. Yesterday the market showed some moderate declines ahead of the important earnings reports. They disappointed and the market opened lower as big cap tech stocks led the major averages down. They stabilized until Powell threw cold water on the prospect of a rate cut in March and then sold off hard into the close. The losses were significant, but the market made highs on Monday and the damage of the last two days is moderate so far. If you look at the charts of the major averages they must hold the tops of the consolidations they just broke above and should hold above their 21dema’s. So far the damage is not that worrisome, but that could change with much more downside action. There are several important and potentially market moving earnings reports tomorrow and the employment report on Friday. Hopefully they will be more positive than we have seen in the last two days. Jerry
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