The market took a pretty good hit today along with international markets on news of new tariffs on Turkey. The major averages opened lower and were weak the rest of the session. The losses were pretty evenly distributed with the COMPQ off by .67% and the SPX lost .71%. The NDX lower by .79%. All the major averages finished near their intraday trading lows, a sign of lack of support as prices fell. Volume was higher across the board, showing selling pressure from large institutional players and adding a fresh distribution day to all the major averages. Leading stocks were lower as well with the leaders index declining .33% and closing in the lower half of its trading range. Volume was lower and well below average so there was limited selling pressure in quality growth stocks. The relative strength line of the leaders index made a new high. Today’s action was disappointing. How the market reacts to news is very telling. The news today on Turkey wasn’t good, but they are not that important a country. Contagion can start with small countries but I think the market’s reaction was a sign of some weakness. It would have been much more encouraging if the market could regain early losses and close strong. That didn’t happen. The damage on the charts was pretty limited and the chart of the leaders index looks solid, but it would have been better if the market had reacted to the news in a more positive fashion. Jerry
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