Jerry Samet
10-20-2012, 12:02 PM
The market got hit hard yesterday with the major averages down between 1.7% and 2.2% on the session with the COMPQ leading the way down. Volume increased across the board, partially due to expiration, which produced distribution days on all the major averages. The COMPQ fell further below it's 50dma and undercut it's recent low so the count for an FTD is reset. The SPX closed fractionally below it's 50dma but did not undercut so it could still produce an FTD next week. Leading stocks, especially tech stocks, got hit hard again and went further below it's 50dma. The index fell 1.71% on lower but still well above average volume. We are clearly in a correction, but the question is how far it will go. We are currently in the fourth year of a cyclical bull that began in March of 2009. This is late in the cycle so the odds of this turning into a full fledged bear market are high. The sidelines is the best place to be. Jerry