Jerry Samet
12-10-2022, 10:50 AM
The market put in a negative session yesterday. After the PPI numbers came in somewhat higher than expected the major averages opened mixed and traded near the unchanged level most of the day. Late selling came in and all the major averages closed near the bottom of their intraday trading ranges. The COMPQ and the NDX lost .70% and .64% respectively. The SPX declined .73%. Volume was lower across the board. It fell 5.56% on the New York and .69%o on the Nasd. Leading stocks were lower as well with the leaders index falling 2.26% on the day. The index closed low in its trading range on lower and below average volume. The index also finished below its 50dma for the first time since the summer. The market didn’t have to strong a reaction to the PPI numbers and traded mostly around the unchanged level most of the day. Selling came in during the last half hour and drove the market to close at the lows of the session. There were some negative signs in the last couple of days. The SPX broke back below its 50dma. When a major average or a stock regains this important moving average and loses it again it is a pretty negative sign. The leaders index also broke below its 50dma. This is critical as this moving average is a real line in the sand for leading growth stocks. Breaking below it is very negative. Next week is a big week for news as the CPI comes out on Tuesday and the Fed announcement is Wednesday. It seems that 50 basis points is pretty much baked in the cake, but the news conference is always a wild card. The market is acting weak right now and at this point the action indicates lower prices ahead. A weak CPI number could spark a short term up move, but I don’t think it would last long. Jerry