Leaders Index 10-6-22

The market sold off today after three days of positive action. The major averages opened a little higher but then spent the rest of the session working their way lower. All the major averages finished near their intraday trading lows. The COMPQ and the NDX lost .68% and .76% respectively. The SPX declined 1.02%. Volume was mixed. It gained 7.56% on the Nasd and declined 1.97% on the New York. Leading stocks were lower as well but less than the overall market. The leaders index fell .41%. The index closed in the lower half of its trading range on lower and below average volume. The market staged an oversold bounce in the first two days of this week as the major averages staged strong price gains. Yesterday it looked like a big down day but the market recovered most of the losses before the close. Today the market sold off on higher volume on the Nasd. The gains earlier in the week were likely caused by weaker than expected economic news that convinced some traders that the Fed would pivot on its rate increases. That appears unlikely. The market was very oversold so a bounce had to come sometime, but I don’t think it will produce more than a moderate move. Major bear markets end when market participants almost universally give up on the market. The fact that so many people would jump in with both feet on just some weak data shows that we are not at that point yet. The employment report comes out tomorrow before the open and that will set the tone for trading tomorrow. Next week there is important inflation information coming out. Those numbers will effect trading, but I don’t think the final bottom is in. Jerry