Jerry Samet
12-17-2016, 12:56 PM
The market opened higher yesterday, but the gains were short lived. After reaching their highs in the first ten minutes of trading the major averages spent the rest of the session working their way lower. The COMPQ finished with a loss of .36% while the SPX declined .18%. Both closed near the bottom of their intraday trading ranges, a sign that market participants were selling into early gains. Volume was higher across the board and above average on both exchanges. This was due to Friday being an expiration day, but it was still enough to produce a new distribution day on the Nasd averages. Leading stocks were generally lower as well with the leaders index falling .71% on the day and closing low in its intraday trading range. The index again tried to break above its important 17dma, but was unable to close above this resistance level. The market is starting to look like it is struggling. Quality growth stocks have been lagging the overall market for some time as the leaders index was not able to get into new high ground as the major averages did. The relative strength line of the index isn’t looking good as it clearly has a pattern of lower highs and lower lows. The line is also close to breaking below its 50dma. The charts of the major averages still look ok as they are holding short term support, but they look like they are losing some steam by closing low in their trading ranges. The rally is still intact, but it appears to be struggling a bit more now than it has been since the post-election uptrend began. Jerry