Another day, another downturn in the final hour of trade.
On Friday, markets were sinking diving deeper into the close, mimicking a similar retreat from intraday gains on Wednesday and Thursday.
On Thursday, a flirtation with a respectable comeback a day after entering correction territory proved short-lived, with the Nasdaq Composite
notching another ugly reversal on Thursday.
Thursday’s move appeared to be a head-scratcher for some participants as it seemed likely that the technology-laden Nasdaq Composite might finally finish higher, with momentum buoying the Dow Jones Industrial Average
and the S&P 500
benchmarks and bargain hunters swooping in.
Read: The Nasdaq Composite just logged its 66th correction since 1971. Here’s what history says happens next to the stock market.
However, the advance couldn’t hold and the turnabout in the market was pronounced. The finish left the Nasdaq Composite, which was up over 2.1% at its Thursday peak, with its largest reversal from an intraday high since April 7, 2020, Dow Jones Market Data showed.
The Nasdaq Composite closed down around 1.3% on the session, lurching decidedly lower in the final hour of trade.
Frank Cappelleri, executive director and technical analyst at Instinet, told MarketWatch that there is a simple reason why the market is collapsing.
Check out: Opinion: A bullish sign? Nasdaq investor sentiment is worse now than it was in March 2020
“We’ve shifted from buy the dip, to sell the rip,” he explained, using market slang for a rally.
“Today was a microcosm of what has been happening,” he said, and he cautioned that many areas of the market have still failed to achieve conditions that market technicians describe as oversold, which means that more selling may be in store.
“If we continue to get closes like this, it just tells use that the market isn’t ready to turn higher,” Cappelleri said.
See: At least 7 signs…