A Down Day but No Major Damage

On Tuesday, the general market opened below Monday's low and initially got a mild bounce, but then price turned down on higher momentum and the market set a new low for the day. That low was tested two more times and held, allowing the market to advance mildly off the lows in a move that began around 3:00 pm. 

The Nasdaq closed down -8 points (-0.20%), the S&P lost -5 points (-0.32%), and the Dow fell -52 points (-0.33%). Volume was heavier than Monday for both the S&P and Nasdaq. The decliners beat the advancers by a ratio of 1.4 to 1 (strong down days have a 2:1 ratio or higher). 

Despite the day being a down day, price did not deteriorate into the close, a mildly positive sign. The market has been weak, but there hasn't really been wholesale dumping of stocks, and the indices all remain above their 50 EMAs. All three indices are at or above their respective 10 SMAs. Many stocks have been consolidating around their 50 EMAs, and a market rally would trigger several 50/50 trades.

It appears that Congress has come to a tentative agreement on the debt ceiling, and that could give the markets a lift on Wednesday. Looming larger is the Fed meeting next week, and Wall Street will be listening carefully for any hint that the quantitative easing will be tapered soon.