Jerry Samet
02-03-2014, 11:18 PM
The market really got pasted today. After opening lower it was all down hill for the rest of the session and all the major averages closed at their lows of the day. The COMPQ led the way down with a loss of 2.61% with the SPY close behind, declining 2.28%. This was the worst day the market has had in over a year. Volume rose dramatically across the board and was well above average. This produced another distribution day on all the major averages and was the second down day in a row on very heavy volume. Leading stocks got hit even worse than the overall market with the leaders index dropping 3.45% on slightly lower but still well above average volume. Up until today the index was trading between it’s 17dma and it’s 50dma and I said that we would soon find out which way it was going to break. We got our answer today as the index crashed below the 50dma on volume. The damage was wide spread and only one stock in the IBD 50 was up on the day. The correction is building and it is looking different from previous corrections in the last year that quickly recovered and went into new high ground. It is looking like this one will be the real thing. Both the COMPQ and the SPY are just under six percent below their recent highs and are close to the eight percent limit that contains short term corrections. If the decline continues we will have an intermediate correction if not the bear market that I think is long over due. February is off to a bad start, the good thing is it is a short month. Jerry