The market was really pasted yesterday with selling across the board. The major averages opened a touch higher and then sold off for the rest of the day. All the major averages finished near the bottom of their intraday trading ranges. The COMPQ and the NDX fell 2.20% and 2.06% respectively. The SPX declined 1.71%. Volume was higher across the board, adding a new distribution day on all the major averages. Leading stocks were crushed. The leaders index fell 5.97% on the day. The index closed low in its trading range on lower but above average volume. The index closed right above its 50dma. The market was hit hard yesterday as the positive action earlier in the week was wiped out. It looked like the market might start a new move higher when the SPX and the NDX broke into new high ground, but the action of the last two days ended that hope. The selling has been hard and on high volume, showing that large institutional players were selling stocks heavily. The COMPQ broke back below its 50fmas while the SPX and the NDX are hold just above this important moving average. The worst thing about the last couple of day’s action was the beating leading stocks took. They were supportive of the rally as the market usually doesn’t get into too much trouble when quality growth stocks are outperforming. That is no longer true. Right now we are back in this choppy action that can chew up an account with a series of small losses. A defensive posture is warranted until we get a clearer picture of where the market wants to go. Jerry
Reply With Quote