Jerry Samet
05-29-2018, 06:35 PM
Risk off came back with a vengeance today. A potential political crisis in Italy sent European markets sharply lower before the U S markets opened. When trading started in the major averages they started lower and declined most of the session. Some late buying say them close off their lows. The worst of the damage was done in the New York stocks with the SPX lower by 1.16% and the NYA declining 1.52%. The Nasd averages did better as the COMPQ was off by .50% and the NDX fell .49%. The New York averages closed low in their intraday trading ranges while the Nasd averages finished in about the middle of their trading ranges. Volume was higher across the board. This is a smaller than normal hurdle as volume is usually low on the day before a three day holiday weekend, but it was still enough to produce fresh distribution days on all the major averages. Leading stocks performed better than the overall market with the leaders index falling only .27% on the session. The index closed slightly above the midpoint of its trading range and it remains above its short term 9dma support level. The relative strength line of the leaders index made a new high. The market got hit pretty hard today, but it is the New York averages that look like they need some help. The day’s action took the SPX to just above its critical 50dma support. The INDU fell slightly below this level while the NYA fell below both its 50dma and its 200dma. The charts of the COMPQ and the NDX look better as they are holding above their short term support levels. A sell off like this is never fun(unless you are short), but the damage looks fairly contained so far. The leading stocks are acting pretty well and the Nasd averages are also holding up. The New York averages are more of a problem. We need to see a strong snap back pretty quickly to confirm that the current rally attempt is still intact. More weakness would be very negative. Jerry