Jerry Samet
02-12-2022, 11:37 AM
The market got hit pretty hard yesterday. After opening little changed the selling quickly came in and the market started declining. News that a Russian invasion of Ukraine might be around the corner accelerated the decline and all the major averages finished near the bottom of their intraday trading ranges. The Nasd averages took the worst of it with the COMPQ and the NDX falling 2.78% and 3.07% respectively. The SPX declined 1.90%. Volume was higher across the board. It gained 13.31% on the Nasd and 2.71% on the New York. This combined with the price declines produced a fresh distribution day on all the major averages. Leading stocks were lower as well with the leaders index falling 1.83% on the day. The index closed in the lower half of its trading range on higher and slightly below average volume. This showed distribution in quality growth stocks. The market was weak all day but the selling accelerated on news that a Russian invasion might be imminent. There were large declines for the second day in a row. The higher volume showed that large institutional players were selling stocks yesterday. The short rally attempt took several of the major averages above important moving average resistance only to break back below these levels in the last two days. Recovering an important moving average after falling below it, only to lose it again is a very negative sign. Making predications in the stock market is always a dangerous game, but it is getting easier to say that we are in a bear market. It looks like the major averages are completing head and shoulders patterns in their charts, and that would point to continued weakness. The question now is how far this decline will go and how deep the bear will be. That question can only be answered in time. Jerry