Jerry Samet
06-11-2016, 11:32 AM
It was a weak session yesterday as the major averages sold off at the open and some even gapped lower. They were weak all day until a little late buying allowed the major averages to close slightly off their lows of the day. The COMPQ lost 1.29% on the session while the SPX fell .92%. The worst weakness was in the small and mid cap stocks along with the semiconductors. The RUT and the MID fell 1.46% and 1.44% respectively. The SOX declined 1.67%. All the major averages closed very close to their intraday reading lows, a sign of a lack of buying on weakness. Volume was higher across the board and above average on the Nasd. This added a new distribution day on all the major averages and showed that large institutional players were selling stocks. Leading stocks were hit as well with the leaders index falling 1.46% on the day and closing low in it’s intraday trading range. Volume was higher than Thursday but still well below average. This produced distribution on the leaders index as well as the major averages. The index broke below it’s short term 9dma that has been supporting it during it’s recent consolidation and even traded below it’s 17dma before closing above it. The 17dma is critical support as the best stocks rise above this important moving average. The index is now below it’s recent consolidation area, which is a negative. The market is bumping up against important resistance. The COMPQ came right up to it’s recent highs of 4/20 of this year and the SPX is just below it’s all time highs of last summer. They must surpass these levels to keep the rally going. If they can’t the current uptrend will likely stall out and the market will head lower. Jerry