Jerry Samet
05-07-2019, 07:20 PM
The market really got pasted today. The major averages, like yesterday, gapped lower at the open. Unlike yesterday there was no recovery. All the major averages closed low in their intraday trading ranges, although some late buying saw them finish off their absolute lows. The Nasd averages were the weakest, but not by much. The COMPQ and the NDX fell 1.95% and 1.98% respectively. The SPX declined 1.65%. Volume was a lot higher across the board. It rose 22.18% on the Nasd and 20.90% on the New York. This shows significant institutional selling and produced a fresh distribution day on all the major averages. Leading stocks were hit hard as well with the leaders index falling 2.24% on the session. The index closed in the lower half of its trading range and volume increased a lot and was above average. The index also closed below its important 17dma now resistance level. This shows distribution in quality growth stocks as well as the overall market. Today’s action was very negative. There was real institutional selling as significant losses were accompanied by very heavy volume. The DOW and the NYA both broke below their respective 50dma’s. This is very negative. Most of the selling can be attributed to news on the China trade talks. It is difficult to operate in this kind of news driven market as one favorable news story could cause a rally that regains most or all of the recent losses. Protecting gains and capital is always the most important factor to consider and some real damage was done today. The leaders index is weakening and its relative strength line is approaching its 50dma. When leading stocks are weaker than the overall market it is concerning. You don’t have to start selling wholesale at this point. But standing pretty close to the exit is a good idea. I will be away again for a few days. The updates will resume on Monday. Jerry