If you didn't sense some panic on Tuesday, your face wasn't buried in a computer screen during the afternoon. As such, you didn't notice margin calls, hedge fund angst, some major dislocation in the financial community, etc. Still, after the indices gave up large gains -- with the S&P 500 (SPX) at one point up a whopping 4% -- the index filled its opening gap and tried to rally. After almost reaching 5,100 at 2:35, the index fell hard, dropping to near 4,900 by 3:50. When all was said and done, the SPX was off 1.6%, the Nasdaq and Nasdaq 100 (QQQ) fell 2%, the S&P 400 gave up 2.2%, and the S&P 600 dropped 3%. Since its 11/25/2024 closing top, the small-cap index has crashed over 28%. Will small caps ever be in favor? Their relative strength versus the SPX has been consistently lower for the past four years. The SPX has fallen to another cluster of support. But so far, every support level since the decline started has been obliterated. The index's recent low was a 50% retracement of the bull market off the October 2022 bottom. In less than eight weeks, the index has given back half of the gains that took over two years to accomplish. NYSE breadth was +2,600 early on, but finished at -1,800. NYSE up volume/total volume was only 17%. The VIX closed at a new high for this correction, at 52%, and remains outside its upper Bollinger Band (BB). The SPX remains below its lower BB, so a price reversal could be bullish. The NYSE McClellan Oscillator is very oversold near -100. That all said, long-term breadth (issues above their 200-day) remains in danger territory, as does the percentage of NYSE stocks at new lows. (Mark Arbeter, CMT)

Tuesday was a strange day for the S&P 500 (SPX) as all the losses occurred by 10:00 a.m. After that, the index went sideways, trading in a range between 5,598 and 5,628 for the rest of the session. The other major indices did the same thing as market participants seemingly decided to take the rest of the day off. Market breadth cooled after two straight days of strength. Consumer Discretionary dropped 1.8% (as TSLA fell another 5%), Information Technology dipped 1.5% (as NVDA and AVGO fell 3%), and Communication Services fell 1.4% (on a 2.3% drop in GOOGL and a 3.7% drop in META). Even the defensive Consumer Staples sector gave back over 1%. Energy saw a minor 0.2% gain. According to stockcharts.com data, the stock market posted two breadth thrusts in a row (on Friday and Monday) after a 10% correction. While this does not rule out a retest of the lows or a lower low, returns going forward from two months to a year almost always have been very good. NYSE advances/total issues were in the low 80%, while NYSE advancing volume/total volume was between 88% and 90% on those two days. Gamma Exposure, which refers to the sensitivity of existing option contracts to changes in the underlying price of the S&P 500, has dropped into an extreme area that historically has been bullish for stocks in the intermediate term. In addition, the SKEW Index, which is an indicator designed to measure market risk at any given point in time, has flashed a bullish sign based on its 13-week rate-of-change. Obviously, market conditions remain quite fluid and headline risk certainly has not disappeared. (Mark Arbeter, CMT)

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U.S. stocks closed lower on Thursday, driven by Technology, Utility and Consumer Services stocks. The worst performing stocks were NVIDIA (NVDA), down 8.5% and Super Micro Computer Inc. (SMCI), down 16%. The S&P 500 fell 1.6%, the Dow dropped 0.4% and the Nasdaq lost 2.8%.