Jerry Samet
02-27-2018, 06:40 PM
The market got hit pretty hard today. The major averages showed a little strength after the open and it looked like the gains of the last couple of days would be held on to. About an hour into trading selling came in and all the major averages declined steadily into the close. The losses were fairly significant with the COMPQ declining 1.23% while the SPX lost 1.27%. All the major averages closed at their intraday trading lows , a negative sign. It was also an outside day on all the major averages. Volume was higher across the board so there was a fresh distribution day on all the major averages. Leading stocks were lower as well, although they held up better than the overall market. The leaders index was lower by .41% and it closed low in its trading range. The index made a new intraday high before the selling came in. The relative strength line of the index turned up and volume was lower than yesterday. This means that there was no distribution in quality growth stocks. Today’s action was disappointing. The selling seemed to come in after Powell’s testimony before Congress seemed to suggest that the economy was strong and market participants seemed to think that would mean more interest rate hikes this year. The New York averages are again dancing with their important 50dma’s as the SPX is just slightly above this support level while the NYA fell back below it. The market needs to rally back strongly to avoid further declines. The follow through that occurred on 2/14 is still in effect, but if we get much more action like today it won’t be. The major averages need a solid rally into new high ground with strong volume behind them to tell us that the recent uptrend will continue. Jerry