A promising equities rally evaporates in the final hour, which again proves decisive.
DJIA falls 20 to 10191, after rising as much as 118 in the morning; S&P 500 slips 2 to 1090, after rising as high as 1106. Nasdaq Comp gains less than 1 to 2244. NYSE volume is low. Treasurys slide, euro holds over $1.22.
The rally looked like it was built on sand, at least it did to us, and it proved true in the afternoon when the sand shifted. It was the kind of rally that built on a dearth of any news, as if the bulls were interpreting no news as good news. But that’s not a strong foundation, which is one reason stocks gave way so easily when they ran into resistance.
The bulls still have some goals in view, like the 200-day moving average on the S&P and Dow, but today makes those goals that much harder. The Nasdaq, which had been above its 200-day moving average, now at 2249, slipped under it with the late selloff.
Notably, the DJIA has failed its latest test of resistance at the 200-day simple moving average, which it has been below since May 20, our colleague Tomi Kilgore points out.
The index reached an intraday high of 10329, just below the 200-day at 10352, before reversing to close down 20 points at 10191. The DJIA had climbed to within 100 points of that line five times in late-May and early-June without reaching its target. Perhaps the failure shouldn’t be much of a surprise, since only 8 of 30 Dow components closed above their respective 200-day moving averages.