Jerry Samet
04-17-2013, 11:42 PM
It sure seems like the fat lady belted out a tune today. All the major averages were hit hard, with losses ranging from 1.43% on the SPY to 1.84% on the COMPQ. Volume was much higher across the board so there was distribution everywhere. All the major averages are now below their 50dma’s except the SPY, which held that important moving average after trading below it during the session. Leading stocks again got hit harder than the overall market with the leaders index falling 1.82% on higher but about average volume. This continued the pattern of high volume declines followed by lower volume rallies on both the major averages and the leaders index. This is not a positive pattern. The index held it’s 50dma but tagged it during trading. It is caught between the 50dma and the 17dma. It looks more likely to to break down. IBD went to market in correction and it looks like the rally that began after Thanksgiving is over. This late in the cycle there is a real danger that this will turn into more than a correction. The sidelines or probing the short side would seem appropriate now. Jerry