Jerry Samet
08-02-2023, 06:28 PM
The market got hit hard today after news that Fitch was downgrading the U S credit rating. The major averages opened lower and mostly worked their way down the rest of the session. All the major averages finished low in their intraday trading ranges. The COMPQ and the NDX fell 2.17% and 2.21% respectively while the SPX was off by 1.38%. Volume was higher across the board, showing that large institutional players were selling stocks today. The volume combined with the price declines produced a new distribution day on all the major averages. Leading stocks were hit as well with the leaders index falling 2.22% on the day. The index closed low in its trading range but held its short term moving average support. Volume was higher and above average. The market took a hit today on news of the credit rating downgrade and a flood of new Treasury bond issuance. The market has been a bit weak lately and was setting up for a consolidation or a pullback. It often just takes a nudge to get it going. That may have happened today as the Nasd averages broke important moving average support. It looks like there will be something of a correction coming, but at this point we can’t know how big it will be. This is a time of year when the market takes a break and sells off a bit, but I don’t think it changes the longer term encouraging picture. Jerry