Jerry Samet
02-09-2016, 12:35 AM
About the only good thing you can say about today’s action is that the market closed off it’s intraday lows. The major averages mostly gapped lower at the open and continued down until about an hour and a half was left in the session. Then there was a rally off the lows, but all the major averages finished with significant losses. The COMPQ lost 1.82% while the SPX fell 1.42%. Both closed in the upper half of their intraday trading ranges and the COMPQ closed near it’s high. The COMPQ gapped lower today and broke below it’s August lows, joining the other major averages in taking out this important support level. It also set a new 52 week low, along with the RUT. Volume was higher across the board, showing that large institutional players were heavy sellers. This produced another distribution day on all the major averages and IBD went back to a correction call. Leading stocks were hit hard as well with the leaders index falling 4.25% on the heaviest volume in months. The index tagged it’s 200dma today but the late rally saw it close above this moving average. It was another big red candle and the relative strength line on the index is about to break below it’s 50dma. The bear market deepened today and nothing is immune. Even the few mega cap tech stocks that were holding up the major averages are badly broken. In my year end update I said that we would likely look back at 5/20/15 on the SPX at 2134.72 and 7/20/15 on the COMPQ at 5231.94 as the highs for the current cycle. It looks like that scenario is playing out. Jerry