The stock market had another rough day yesterday…and all of the major averages got hit especially hard late in the day. This caused them all to close on their lows of the day. That said, the “internals” were not as bad yesterday…as they were on Tuesday. The composite volume was actually lower (which is a surprise…because the first day of a trading week tends to have the lowest volume of the week). Also, the breadth was not anywhere near as bad. It was 3 to 1 negative for the S&P 500 (vs almost 8 to 1 negative on Tuesday)…it was just over 2 to 1 negative on the Nasdaq Composite (vs. more than 5 to 1 negative on Tuesday)…it was less than 2 to 1 negative for the NDX Nasdaq 100 Index (vs. more than 13 to 1 negative on Tuesday)…and it was 4 to 1 negative for the Russell 2000 (vs almost 13 to 1 negative on Tuesday).
In other words, even though yesterday was not a good day for the stock market whatsoever…and even though it closed on its lows for the day…it actually showed some signs that the selling pressure is fading a little bit…at least over the very-near-term.
The late day sell-off did take the S&P 500 below its 100-DMA…and the Nasdaq Composite further below its 200-DMA. However, the NDX Nasdaq 100 is still slightly above its own 200-DMA…and we need to point out that the S&P 500 has only broken very slightly below that 100-DMA. As we have mentioned many times in recent weeks, the 100-DMA has been VERY strong support for the S&P for over a year, BUT we have also highlighted that it has broken slightly below that line a couple of times…only to regain the line very quickly. Therefore, we have said ...