{"id":63594,"date":"2023-03-10T13:25:52","date_gmt":"2023-03-10T21:25:52","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=63594"},"modified":"2023-03-12T19:35:21","modified_gmt":"2023-03-13T02:35:21","slug":"bears-convert-picture-perfect-resistance-into-major-breakdowns-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2023\/03\/10\/bears-convert-picture-perfect-resistance-into-major-breakdowns-the-market-breadth\/","title":{"rendered":"Bears Convert Picture-Perfect Resistance Into Major Breakdowns – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary:<\/strong><\/h2>\n\n\n\n

Unlike the prior week<\/a>, last week was all about the fundamentals, and the fundamentals made a huge difference. After failing to break through picture-perfect resistance levels, especially the 20-day moving averages (DMAs) (the dotted lines in the charts below), the indices were left vulnerable to selling pressure. The pressure started with Federal Reserve chair Jerome Powell reiterating familiar hawkish themes in verbal responses during Congressional testimony<\/a>. The pressure continued with bank failures. The final blow came from yet another strong jobs report (this one for February<\/a>) – recall that strong economic news is bad news for a Wall Street that needs a recession<\/a> to compel the Federal Reserve to cut interest rates. As a result, the stock market suffered from major breakdowns, broadly distributed across the major indices. <\/p>\n\n\n\n

Suddenly, the stock market went from bouncing off picture-perfect support to confirming the short-term top from early February<\/a>.<\/p>\n\n\n\n

For giggles, I asked ChatGPT whether Powell’s prepared remarks for Congress were hawkish, dovish, or neither. The AI voted for “neither” and explained its reasoning based on Powell’s relatively balanced language:<\/p>\n\n\n\n

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“The speech from Fed chair Jerome Powell is neither dovish nor hawkish. Powell expresses a strong commitment to returning inflation to the Fed’s 2 percent goal, acknowledging the significant hardship caused by high inflation. Powell notes that the recent economic data suggest that inflationary pressures are running higher than expected, but inflation has moderated somewhat since the middle of last year. Powell also highlights that the labor market remains extremely tight, with strong job gains and a lagging supply of labor. The Fed’s monetary policy actions are guided by their dual mandate to promote maximum employment and stable prices, and they will continue to make decisions based on incoming data and their implications for the economic outlook. Powell’s overarching focus is on restoring price stability, which is essential to achieving maximum employment and stable prices over the longer run.”<\/p>\n<\/blockquote>\n\n\n\n

Powell tried to stay boilerplate, but members of Congress forced him to make his hawkishness plain.<\/p>\n\n\n\n