Jerry Samet
04-05-2017, 06:33 PM
The market started off strong today as the major averages gapped(at least from yesterday’s close) higher at the open. It held those gains nicely until there was a little over two hours of trading left. Then in what may have been at least in part in response to the Fed minutes the market staged a pretty dramatic reversal and sold off hard into the close. The COMPQ declined .58% while the SPX lost .31%. All the major averages finished at their intraday trading lows, showing that there was little buying interest as prices fell. Volume increased across the board and was above average on both exchanges. This means that large institutional players were selling stocks pretty hard. Leading stocks joined in the selling as the leaders index declined 2.33% on higher and just below average volume. The index broke below both its short term 9dma and 17dma and closed near the bottom of its trading range. The break below the important 17dma is especially worrisome. The large red candle is similar to the one on 3/21. The index recovered from that sell off. It must recover from this one pretty quickly. The sharp reversal we saw today on strong volume is a big negative. It added another distribution day on all the major averages and showed real selling pressure. The COMPQ and the NDX made new highs early and lost them. The NYA is back below its important 50dma support level. Reversals like this can often signal a change of trend. Weather this one will or not remains to be seen, but this was a very negative day. Jerry