Today doesn't qualify for distribution, as the drop was small and the volume was just barely lower than yesterday. Having said that, it does concern me that the market, from top to bottom today, had a very substantial drop, and again it was the leading areas of the market taking the brunt of the punishment. Whether today was a delayed reaction to the FOMC or just an overdue pullback is not know, but for now we can safely assume it to be the latter. The market is nowhere near testing any critical support levels, and is much closer to testing resistance, which, all things being equal, it could do at any time now. One thing to note here is that stochastics have shown some weakening, even with today's big move up, but have not pulled the trigger on a move down. MACD histogram has been dropping for a while, but so far all that is indicating is a slowdown in the move up. We could pull back a percent or two here anytime, but a major correction is so far not in the cards.
The Nasdaq 100 had a slightly scarier drop today, but is ion about the same technical condition as the SPX. We won't know for a few days whether this was a one day anomaly or the start of a trend.
I don't look at the NYSE composite much unless we are looking for a follow through day (IBD uses this as one of the indices to make that call. Ironically, the NDX is not one of them). This has been lagging even worse than the Russell 2000, and nearly had a failed breakout today, but unlike the other indices it rose substantially off the lows to nearly finish positive, and above yesterday's breakout point.
Also on the NYSE, the percentage of stocks above the 50dma didn't budge today. This has been over 75 for almost two weeks now, and is at a point where it normally reverses. It shows no signs of that yet, although I suspect it will soon. that does not necessarily mean a correctio: the market can mpove sideways for a while and have this drop. In any case, it is badly "overbought", and, at least historically, the odds of it staying this high are very low.
This is the same indicator on the Nasdaq. It is still trying to catch up to the NYSE, and looks like it might. It is only about a week over 70 and still rising. It is concievable that this will still rise while the NYSE starts dropping, but that won't last long. About the most bearish thing I can say now is a pullback is slightly overdue.
The bull party we had yesterday after the FOMC announcement was supposed to carry on today, but we did get a pretty nasty reversal Not nasty enough to be considered a key reversal, ans so far there is no real sign of a trend change. this may just be a pause to reload.
I will have the new highs update shortly.
