Jerry Samet
01-27-2025, 07:15 PM
After acting pretty well last week, the market took a real hit today. Over the weekend the Chinese AI company DeepSeek announced an AI model that could threaten US companies. The major averages gapped down at the open as tech stocks were hit hard. The SPX lost 1.46% but closed high in its trading range. The NASD averages were much harder hit with the COMPQ and the NDX falling 3.07% and 2.97% respectively. They closed in about the middle of their intraday trading ranges. Volume was higher across the board, producing a new distribution day on all the major averages. The market got hit hard today over worries about advances in Chinese AI. The major averages gapped down at the open, but mostly traded sideways the rest of the day. A lot of damage was done today. Leading stocks got hit hard with the leaders index falling 5.62% on the day. The index closed in about the middle of its trading range on higher and above average volume. The index held its 50dma. It was a very negative day as tech stocks were hit hard a news of new potential competition in AI from China. Many stocks had big losses, but interestingly there were a decent number of breakouts today. The COMPQ lost its 50dma while the SPX held this important moving average. The question now is whether this is the start of a larger decline or if it is a short term thing that will reverse in a few days. This is an important week for news. The is a Fed announcement on Wednesday and three mag 7 stocks report on the same day. If these earnings reports are strong they could reverse much of today’s losses. Either way the market must rebound quickly from this selling or a larger decline could be in the works. Jerry