Jerry Samet
10-22-2014, 07:31 PM
The market opened about flat to a little bit higher. After a couple of hours of fairly uneventful trading the major averages started selling off. They continued lower for the rest of the session and closed at their intraday lows. The COMPQ led the way lower with a loss of .83% while the SPY was off by .73%. Both remain above their 200dma’s. Volume was mixed, higher on the Nasd and a bit lower on the New York(according to esignal). This produced a distribution day on the Nasd averages. A distribution day this close after a follow through is a negative sign and often leads to a failed rally attempt. Leading stocks had a lower session as well with the leaders index declining .77% on slightly higher and above average volume. The index also traded higher early and then sold off and closed near it’s lows of the day. The events in Canada today clearly had an effect on the market and some of the losses may well be recovered tomorrow. But what ever the cause there was clearly distribution today and it is a warning sign. How the market trades in the next couple of days will tell us a lot about the fate of this rally attempt. For now a good bit of caution is a good idea. Jerry