Jerry Samet
09-19-2015, 11:21 AM
The market had a rough session yesterday. The major averages opened down and worked their way lower for the rest of the session. All the major averages finished at or near their intraday lows, so there was little support at the close. The COMPQ finished lower by 1.36% while the SPY lost 1.62%. The market appears to be having a pretty negative reaction to the Fed keeping interest rates at zero. Volume was higher across the board, as would be expected on an expiration day, but it still counted as a distribution day on all the major averages. Leading stocks declined about in line with the overall market as the leaders index lost 1.52% on higher volume. This was distribution in quality growth stocks as well. The index closed near the bottom of it’s intraday trading range and tagged it’s short term 9dma. I have said since the market broke almost four weeks ago that the COMPQ might well rally back to it’s 200dma and how it reacted there would be very telling about the market. When a stock or index breaks an important moving average it often rallies back to it. If it can break above this resistance level that used to be support the worst may be over. The COMPQ did just that after the Fed announcement and even tagged the 50dma. It reversed lower Thursday and continued to decline yesterday with some vigor. The test seems to be failing. The market could always turn higher as you can never be sure what it will do, but the picture looks pretty dark right now. Jerry