Stock Indices Tank On Fed Comments

The balloon of hope the market had since the June 17 low had a hole punched in it today with the Fed Chairman’s comments. From a technical perspective and as I have been discussing in the Briefings, the rally was extremely weak from an internal basis. Market breadth was diverging and, more importantly, volume was declining each day. Today, the Indices traded through important intermediate-term support levels and closed at the lows of the day, suggesting the possibility of lower prices on Monday. If there is, watch for a divergence in breadth for a possible pause or countertrend rotation. The market was extremely oversold at the close today. While that does not preclude additional downside, it is good to watch for other signs of a pause.

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