Jerry Samet
05-16-2024, 06:28 PM
The market staged a moderate reversal after some early strength. The major averages opened higher in a continuation of yesterday’s positive action. It didn’t last long as selling came in and lasted into the close. All the major averages finished near their intraday trading lows. The COMPQ and the NDX fell .26% and .21% respectively. The SPX declined .21%. Volume was mixed, lower on the New York and higher on the NASD. This produced a distribution day on the NASD averages. Leading stocks were lower as well. I produced a new leaders index after yesterday’s follow through. It contains 21 stocks in 15 industry groups. I think it is a good cross section of current leading stocks. After a strong increase yesterday the index fell 1.99% today on lower and below average volume. It closed low in its trading range. After a couple of days of strong gains it is not unusual to see a moderate pullback. It would have been better if the market had held early gains but it didn’t. The price decline was moderate but having a distribution day so close after a follow through is usually a negative for the rally. Distribution this close to a follow through often results in a failed follow through, but it is to early to tell. You could say the distribution was caused by the ridiculous action in the meme stocks, but you could say the same thing about the follow through yesterday. The meme stock crap has been inflating volume for the last few days. Hopefully it will decline quickly. Distribution so close to a follow through is worrisome, but the overall trend still seems to be higher. There will be no update tomorrow. Jerry