Jerry Samet
09-24-2019, 06:18 PM
The market put in a very negative session today. After opening with modest gains the major averages reversed and sold off for most of the remainder of the day. All the major averages finished near the bottom of their intraday trading ranges. The Nasd averages led the way with the COMPQ and the NDX losing 1.46% and 1.39% respectively. The SPX declined .84%. Volume really put an explanation mark on the day’s action as It was much higher across the board. Rising by 34.31% on the Nasd and 27.46% on the New York. These large volume gains and price declines were enough to produce a new distribution day on all the major averages. Leading stocks were hit hard as well with the leaders index falling 2.77% on the day. The index broke below its important 50dma support level and closed low in its trading range. Volume was much higher and well above average. The action today would have to be considered very negative. Market internals were weak and major support was broken. I have been saying that the major averages would either break into new high ground and continue to rally or break the 50dma support and head lower. The Nasd averages broke below their 50dma’s today, while the New York averages held this important moving average. The fact that volume was so high while prices fell hard shows that large institutional players were heavy sellers of stocks today. This is very negative. The leaders index also broke below its 50dma on heavy volume, showing that quality growth stocks, which have been underperforming for some time now, are also likely headed lower. The selling was caused mostly by reports that the House would start a formal impeachment inquiry. This is a very news driven market, but it seems like the news just got worse. It is hard to see how a prolonged impeachment inquiry would be good for the market. Jerry