Jerry Samet
08-22-2022, 06:27 PM
The market took a pretty good hit in the last couple of days. Friday there was a strong selloff that was followed by an even stronger decline today. The major averages opened lower and worked their way down the rest of the day. All the major averages finished near their intraday trading lows. The COMPQ and the NDX declined 2.55% and 2.66% respectively. The SPX lost 2.14%. Volume was mixed. It fell 7.3% on the Nasd and gained 4.59% on the New York. This was enough for a distribution day on the New York averages. Leading stocks were lower as well, but did better than the overall market. The leaders index fell 1.64% on the day but closed in about the middle of its trading range. The index broke below its short term 9dma, but held its 17dma. Volume was higher but below average. The bear market rally that had been in effect since the mid-June lows is showing serious signs of stress. The major averages look like they will be turned back at their 200dma’s. The SPX tagged this important resistance level and turned lower. The RUT broke above this moving averages but couldn’t hold it. The Nasd averages turned down before reaching their 200dma’s. It looks like the rally has run its course. The market seems to be pricing in a 75 basis point rise by the Fed at the next meeting and is awaiting Powell’s comments on Friday. Much of this rally was based on the hope that the Fed would ease off. That appears less likely now. The next support for the major averages is their 50dma’s. If this support level doesn’t hold the next support is the lows of mid-June. Jerry