Jerry Samet
10-08-2013, 11:23 PM
The market got hit hard today as the major averages opened lower and continued down the entire session. A late sell off caused them to finish at the lows of the day with the COMPQ leading the way down with a 2.0% loss. The New York averages fell between 1.19% on the NYA and 1.23% on the SPY. Volume increased dramatically across the board, which produced distribution on all the major averages. The COMPQ finished right on it’s 50dma and all the New York averages are now well below theirs. Leaders were crushed. The leaders index was holding up very well until today. It made a new high Friday on both a price and relative strength basis and held up well during yesterday’s weakness in the major averages. Today it was different as top quality stocks sold off hard on real institutional selling. The leaders index fell 6.52% on the heaviest volume since last August. It cut right through the important 17dma and some of the best stocks, like LNKD, YELP, and FB were hit the hardest. The events in Washington are taking a real toll on the market and it seems there is no end in sight. The rally is dead and IBD went to market in correction today. We will probably see a sharp but short rally if a budget and debt ceiling deal are reached, but so much damage was done today that protecting your capital is the smartest move right now. Jerry