Jerry Samet
10-15-2013, 11:39 PM
The market had a solid down day today. The major averages opened weak and after a mid day rally attempt sold off into the close to finish near their lows of the session. The New York averages were weakest with the SPY and the NYA falling .71% and .72% respectively. The COMPQ reversed after setting a new 52 week high early in the day to close down .56%. Volume was higher across the board so there was distribution on all the major averages. This means that there are now seven distribution days on both the COMPQ and the SPY, a heavy count. Leading stocks were pretty strong early and the leaders index approached it’s recent high early and then sold off with the market later in the day. The index finished down .15% on higher and slightly above average volume. The reversal in quality stocks is not a positive sign for the market. The fact that we had three rally days on lower volume followed by a sell off on higher volume is a big red flag. It looked early like a deal in Washington was going to be made and then we hit a snag and the market sold off. It is difficult to invest when the market is being driven by a bunch of idiots in Washington and that along with the high distribution level means the level of risk is very high. Positions should be taken very carefully. Jerry