Jerry Samet
02-01-2014, 01:44 PM
The back and forth action continued yesterday as the market sold off early and it looked like another big down day. About mid day the major averages started what looked like a reversal as they rallied back and the COMPQ actually got into positive territory for a brief time. It didn’t last though and a late decline took the market back into negative territory . The SPY lead the way down with a loss of .60% while the COMPQ was off .50%. Both were off their intraday lows and in the upper half of the day’s trading ranges. The New York averages remained below their 50dma’s and are now living below this important moving average. The Nasd averages closed right on their 50 days and are continuing their pattern of bouncing above and below this critical moving average. Volume was higher on the day so there was distribution on all the major averages. This continued the recent pattern of declines on higher volume and rebounds on lower volume, a negative sign. Leading stocks generally did better than the overall market and it seemed for a while that we might see positive action in leaders. They sold off late along with the rest of the market but had only small losses. The leaders index fell only .12% on lower but still above average volume and finished above the opening price of the session. The index tagged it’s 50dma again and held it. It continues to trade between a slightly rising 50dma and a declining 17dma. It will break one of these moving averages soon and from the action of the market recently I would think the likely direction will be down, but in this environment who knows. It is better to be cautious until we see more clearly which direction the market and leading stocks will go in. Going either long or short is pretty risky now. Jerry