Today 03/22/23 the FOMC made their interest rate announcement. Later the S&P 500 (SPX) rallied to the low end of the price target zone illustrated in the 03/21/22 blog. After hitting the target zone the SPX dropped like a rock and ended the session at the low of the day. Focusing just on the SPX, a multi – week decline may have begun. An examination of recent Nasdaq Composite (IXIC) and Nasdaq 100 (NDX) activity hint there could be more upside action.
The hourly SPX, IXIC, and NDX chart courtesy of Trading View compares their recent activity.
During the 2022 decline the SPX was relatively stronger than the IXIC and NDX. At the October 2022 bottom the SPX had declined 27% vs. 37% drops for the IXIC and NDX.
Since the 03/13/23 bottom the SPX has underperformed both the IXIC and NDX.
As of 03/22/23 the SPX had not exceeded its 03/06/23 high while the IXIC went above its 03/06/23 top. The NDX has not only exceeded its 03/06/23 peak, but it has also gone above its 02/02/23 top.
Today the relative strength of the IXIC and NDX continued.
At today’s low the SPX had retraced .44 of its 03/13/23 to 03/22/23 rally.
The IXIC has retraced .33 of its 03/13/23 to 03/22/23 rally.
The NDX has retraced .23 of its 03/13/23 to 03/22/23 rally.
During 2022 the IXIC and NDX were weaker than the SPX. In 2023 they are stronger.
The bullish season for stocks continues until at least late April 2023. The seasonal factor combined with relative strengths of the IXIC and NDX hint U.S. stocks could continue to rise into April 2023.