Market Alert - Last Hour

Fed Chair Powell said he would maintain a further gradual increase in rate hikes' to more normalize rates given the economic tailwinds. The nerve.

Stocks sold into midday, rebounded into early afternoon, but the past two hours they sold back to session lows, indeed just a bit lower. Bouncing along the lows the past half hour, not finding any bids and running out of time to push things upside.

Apparently a bit higher rates (10 year at 2.899% vs 2.864% Monday) is something the market has a problem with. No more Yellen, but even she said (as the door was closing behind her) that asset prices were high just as Powell said yesterday.

The small and midcaps, laggards on the bounce, lead on the downside. SP400 stalled at the 50 day MA's and has dropped over 1%. SOX moved to a new high but has coughed that up, showing a tombstone doji. The large cap indices have given up chunks of the Monday move, big chunks. Nasdaq is working on giving back 80%, SP500 same, DJ30 50%.

SP500 -24.61, -0.88%
NASDAQ -66.14, -0.90%
DJ30 -199.12, -0.77%
SP400 -1.17%
RUTX -1.06%
SOX -0.04%
NASDAQ 100 -0.87%

Many big names have made it to prior highs are stopped, e.g. MSFT, INTC. That said, many are down but rather modestly.

Overall volume is running higher; will see how it comes out at the end of the session but higher volume on selling is of course not a good indication for the resumption of the relief move. Not a good day for the upside and Wednesday will show if it was just some indigestion due to the Fed chair that actually is basically another Yellen.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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