Jerry Samet
09-16-2019, 06:31 PM
The market overall reacted to the attack on Saudi oil facilities pretty well. The declines were relatively contained as the major averages opened weak but finished in the upper half of their intraday trading ranges. The declines were pretty evenly divided with the SPX losing .31%. The COMPQ and the NDX were off by .28% and .51% respectively. Volume was mixed. It was lower by 7.02% on the Nasd and up by 23.07% on the New York. Some of the increase in New York volume was related to heavy trading in energy stocks, which are more heavily represented on the New York. It does however produce a new distribution day on the New York averages. Leading stocks did better today than the overall market with the leaders index gaining 1.19% on the day. The index closed in about the middle of its trading range and volume was slightly higher than Friday. The index is sitting right on its important 50dma while the relative strength line remains below its 50dma resistance level. The market continued to be erratic, but right now it is holding up. The chart of the leaders index looks a bit sickly, but it is holding its 50dma, even if just barley. Leading stocks are underperforming the overall market, which is usually not an encouraging sign. The major averages are acting better and are holding nicely above their recently regained 50dma’s. We are sitting close to new highs in the major averages. Two shorter term indicators I look at, the A’s minus E’s and the McClellan Oscillator, are acting well and there are signs of accumulation under the surface. The key now is for the leaders index and the major averages to hold their 50dma’s and move into new high ground. If the COMPQ and the NDX fail to make new highs and break this important support their charts will start to look like potential head and shoulders patterns. There are always cross currents, but right now I think the odds favor the market averages moving into new high ground. Jerry