Jerry Samet
06-27-2018, 06:45 PM
It is difficult to find anything good to say about today’s action. Things started out well as the major averages rallied at the open and showed solid gains for a little over an hour. There was an ugly reversal at that time and the major averages spent the rest of the session selling off. All the major averages finished at their intraday trading lows, a negative sign. The Nasd averages were hit the hardest with the COMPQ and NDX declining 1.54% and 1.39% respectively. The SPX was lower by .86%. Volume was higher across the board so there was a fresh distribution day on all the major averages. The secondary averages were hit even harder with the SOX lower by 2.47% and the RUT off by 1.68%. Leading stocks were hit hard as well with the leaders index lower by 2.76%. The index tagged its 50dma but closed slightly above it. A convergence of the 9dma and the 17dma is providing resistance. Volume was very low on the index, about the only good thing you can say about today. The relative strength line of the leaders index shows that the support of leading stocks outperforming the overall market is gone. Today’s reversal was ugly. Early strength followed by late weakness is the sign of a market in trouble. Major support was broken today as the SPX fell below its 50dma and the INDU and the NYA moved further below their respective 200dma’s. The SOX is also below its 200dma. Quality growth stocks have broken down almost wholesale. This combined with the weakness in the major averages paints a pretty negative picture. I think you can stick a fork in this rally, its done. Jerry