It was an ugly session today. It was announced that new tariffs on China would be announced after the close today and the markets sold off hard. The major averages opened lower and sold off the rest of the session. Most of the damage was in the Nasd averages and leading stocks. New York averages held up better. The SPX was off by .56% while the COMPQ and the NDX fell 1.43% and 1.47% respectively. The SOX declined 1.44% and is back below its 50dma. All the major averages finished at their intraday trading lows as selling continued into the close. Volume was mixed, higher on the Nasd and lower on the New York. This produced fresh distribution on the Nasd averages. Leading stocks were hit hard pretty much across the board. The leaders index declined 1.81% on higher and above average volume. This shows that there was selling by large institutional players in quality growth stocks. The index closed in the lower half of its trading range. The index also broke support at its important 17dma support, now resistance, level. It has been trading along this moving average as it consolidated gains. The loss of this support, especially on strong volume, is very negative. The action of the market and leading stocks today was negative. Real damage was done, particularly to the Nasd averages and leading stocks. The charts of the New York averages still look ok while the charts of the Nasd averages have sold off all the way back to their 50dma’s. A break of this moving average by the Nasd averages would be very negative. It look like there will be new tariffs on China and the possibility of a real trade war has increased. We must see the Nasd averages and leading stocks recover quickly and with conviction or a real sell off may be at hand. Jerry
Reply With Quote