Jerry Samet
10-03-2013, 11:01 PM
The market sold off pretty hard today with the major averages dropping between .72% on the NYA and 1.08% on the COMPQ. We opened lower and were down all day. Volume was higher across the board, producing distribution days on all the major averages. The market seems to be reacting more to events in Washington, and it doesn’t help to have Obama on CNBC talking down the market. Leading stocks took a hit as well. The leaders index was down .52% on higher and above average volume. The mild decline in the index masked what were larger losses in many of the best stocks. Leaders like TSLA, NQ, and YY fell much more than the index. Negative signs are building quickly. The distribution count has risen to six on the SPY and four on the COMPQ. This is a dangerous level of distribution. In addition the A’s minus E’s have clearly turned down as well. The rally is on thin ice right now, and even though a deal in Washington would likely spark an up move, real damage has been done. If the market does right itself fast reducing exposure would probably be a good idea. I will be away for a few days, the updates will resume on Tuesday. Jerry