Jerry Samet
10-25-2017, 06:14 PM
The market sold off pretty hard today. The major averages were lower at the open and sold off for about half the session. They then bottomed out and rallied, but still had meaningful losses. The COMPQ was off by .52% while the SPX fell .47%. The major averages all closed slightly above the midpoint of their trading ranges, which somewhat mitigated the negative effects of the day’s action. Volume was higher across the board and above average on both exchanges. This was enough to produce fresh distribution days on all the major averages. Leading stocks were hit much harder than the overall market. The leaders index was lower by 1.96%. Volume was much higher than yesterday and well above average. This shows that large institutional players were selling quality growth stocks today. The index closed in the upper half of its trading range, but it broke the important 17dma support level. The day’s action was clearly negative. Most leading stocks were hit hard today and real leaders are in danger of giving sell signals. An example is BABA. This stock broke out in January and has rallied above its 10week moving average since then. It is now below this critical support level and if it closes below it at the end of the week will trigger a major sell rule. The charts of the leaders index and the major averages were lower today. The distribution count is beginning to build to worrisome levels and important support was broken. I have been saying that we are in a consolidation but that so far there was no evidence that it would become any worse than the minor consolidations and pullbacks we have seen recently. That changed somewhat today, particularly in leading stocks, and my level of concern is up considerably. Jerry