Jerry Samet
01-29-2020, 06:32 PM
The market put in a volatile session today, which is not unusual on a Fed announcement day. The major averages opened higher and then sold off for a short time. They bottomed quickly and rallied to solid gains. The Fed announcement didn’t do much, then at Powell’s press conference the market started selling off and all the gains were lost. The Nasd averages finished with small gains of .06% on the COMPQ and .12% on the NDX. The New York averages were a little lower with the SPX losing .09%. Volume was higher across the board, according to Esignal. It was higher by 5.30% on the Nasd and 4.24% on the New York. All the major averages closed near the bottom of their intraday trading ranges due to the late selling. This is stalling action. Leading stocks were mixed to slightly lower. The leaders index declined .15% on the day and closed in the lower half of its trading range. Volume was much higher and above average due to earnings reports in some components of the index. It held above its 17dma and avoided distribution due to the small decline. The market was acting pretty well until the press conference took the wind out of the rally. The action after a Fed announcement is often reverses the next day so we will have to see what happens. The market was acting like it was trying to continue rallying until the press conference. If the gains had held the increased volume would have made it a positive session. IBD said New York volume came in lower, but again when the numbers are close there are often different results in different data feeds. Unfortunately this time it made the difference between having a distribution day on the New York averages or not. We need to see the major averages and the leaders index rally back above their recent highs with conviction quickly. The longer they struggle below recent highs the greater the chance that the market will roll over. I said earlier this week that the weekly Coppock looked like it might be rolling over. Yesterday’s gains turned it flat again so it is not as of now on track to give a sell signal. I will report on this again next week. I will be away for a few days. The updates will resume on Monday. Jerry