Jerry Samet
03-07-2020, 11:59 AM
The market had another difficult session yesterday. A much better than expected employment report was not able to help things any as the major averages gapped lower at the open. There was a pretty feeble rally attempt shortly afterward, but it didn’t last. The major averages sold off for most of the day until the last 45 minutes of trading when they all rallied. The major averages all finished high in their trading ranges, but the declines were still significant. The losses were pretty evenly divided with the COMPQ and the NDX losing 1.87% and 1.63% respectively. The SPX lost 1.71%. Volume was higher across the board. It was higher by 15.54% on the Nasd and 20.08% on the New York. Leading stocks were lower as well with the leaders index falling 2.57% on the day. The index closed high in its trading range and volume was higher and well above average. The action of the market yesterday was overall negative. Last week we had two events that should have sparked a rally. The Fed had a special 50 basis point rate cut between regular meetings and yesterday there was a much better than expected employment report. Neither one could generate any rally. When good news is shrugged off by the market it is a real sign of weakness. The leaders index has tried to rally off its lows and so far has been turned back by its declining 9dma. The Nasd averages are well below their important 50dma’s while the New York averages along with the small and midcap averages are all well below their 200dma’s. The rally at the close yesterday was a little suspicious. We don’t know if it was real buying or artificial support coming in to mitigate the damage. Right now we are well into intermediate term correction territory. We will have to see how much further it will go, but it doesn’t look encouraging right now. Jerry