Jerry Samet
10-26-2017, 07:49 PM
The market tried rebound from yesterday’s weakness, but didn’t do too well. After opening higher the major averages spent the rest of the session working their way lower. The New York averages were again the strongest and showed small gains on the day. The SPX was higher by .13%. The Nasd averages finished lower on the day with the COMPQ lower by .11%. All the major averages finished at the bottom of their intraday trading ranges, showing that there was selling as prices fell. Volume was slightly lower across the board so there was no distribution on any of the major averages. Leading stocks were mixed with a somewhat negative bias. The leaders index was higher by .09% on the day, but the chart doesn’t look good. It closed below its opening, producing a red candle. The index closed in the lower half of its trading range and tagged its 50dma during trading. Volume on the index was much higher than yesterday’s already high level and well above average. The picture is darkening quite a bit in the last few days. Quality growth stocks have been showing a lot of weakness lately. The chart of the leaders index is looking sickly as it sells off on high volume. It is well below the important 17dma and the relative strength line of the index broke below its 50dma. This weakness also shows up in the underperformance of the Nasd averages. The major averages are starting to act sloppy and the only chart that still looks attractive is the SOX. There are more and more signs that the market and the current rally are in trouble. In addition there have been Hindenburg Omen signals the last two days, so there is now a confirmed signal. There have been many times in the last year when the market looked like it was beginning a meaningful correction and then turned around and rallied to new highs. That may well happen again, but a more defensive posture is warranted right now. Jerry