For the second day in a row, traders bought a large intraday drop in the market, but this time there was some aggressive selling into the close, and the indexes closed with losses.
Although the bounce was not nearly as energetic as on Monday, the number of new 12-month lows contracted to around 275 from over 2,000. Stocks did not breach the lows that were hit on Monday, and that is a positive. It is very important that recent lows hold, so that conditions can develop for a follow-through day.
After the close, Microsoft (MSFT) reported earnings. Although the numbers were ahead of expectations, the stock is trading down about 4%. Big cap technology stocks continue to lag, with the Nasdaq 100 (QQQ) losing 2.3% today. That isn't necessarily a bad thing as they have not corrected nearly as much as other areas of the market.
Tomorrow, all eyes will be on the Fed's interest rate decision. It is anticipated that Jerome Powell will set the stage for a quarter-point hike at the March meeting. There were some reports today that a half-point hike is off the table. The market will be listening carefully for some less hawkish talk, but there is likely to be another flurry of volatility as it digests the news.
Technically the market has made some positive progress with two intraday reversals in a row to the upside. That will help to build some support, but there is much more work needed.
Have a good evening. I'll see you tomorrow.