The bad news about a trading range is that it provides for choppy and meandering price action. The good news about a trading range is that once it is violated there is strong follow-through.
That was certainly the case in Thursday’s session. The bulls, who had the edge in premarket trading, succumbed to the bears in a big way. Of course, the move lower was instigated by the action and comment from the ECB who raised interest rates and targets for inflation for this year and next.
After the retreat from the premarket highs, the chopfest continued until the S&P 500 index futures breached last week’s low (4071.50). Also, that marked the bottom of an eight-day trading range and really accelerated the pace of the decline.
The biggest gainer of the top components was the smallest loser, UnitedHealth Group Inc. (NYSE: UNH). The issue declined by $4.10 or 0.83 percent for the session to close at $489.53.
That was nearly 3 percent better than the cash index’s decline of 2.38 percent.
Amazon.com Inc. (NASDAQ: AMZN) has begun to surrender some of its pre-stock split gains and was the biggest loser of the top components of the S&P 500 index. The issue declined by $5.03 or 4.2 percent for the session to close at $116.15.