Jerry Samet
07-24-2018, 06:56 PM
The market suffered an ugly reversal today. All the major averages opened strong after the good earnings report from GOOGL. The strength didn’t last long, especially in the Nasd averages, which closed near the lows of their intraday trading ranges. The New York averages did better and closed just below the midpoint of their trading ranges. The COMPQ topped out after ten minutes and only a little late buying saw it close above its absolute lows. It lost a gain of .73% and finished lower by .01%. The NDX did better with the stronger action in a few big cap tech stocks and gained .47%. The SPX was higher by .48%. Volume was well higher across the board, not what you want to see on a reversal day. Leading stocks took a hit with the leaders index falling 1.73% on slightly higher volume. This is distribution in quality growth stocks. The index finished low in its trading range and broke below its 9dma, although it held its 17dma. The big red candle is a negative. Also the relative strength line of the index broke below its 50dma. Today’s action was very disappointing. It looked like there would be a good rally early on after the GOOGL report. It didn’t hold. The New York averages did better and their charts showed some positive action. The NDX was held up by a few big cap tech stocks like AMZN, GOOGL and FB. The weak action in the RUT, MID and SOX hurt the COMPQ and Nasd stocks in general. The type of trading we saw today can point to weaker action ahead. We are in the middle of earnings season and there are some important reports coming up, but what we saw today raises the level of concern quite a bit. Jerry