The market was hit hard yesterday when Trump announced new tariffs on Mexico over the immigration issue. The major averages gapped down at the open and after a weak rally attempt spent the rest of the session working their way lower. All the major averages finished at their intraday trading lows as there was littler is any buying interest as prices fell. The losses were pretty much across the board with the COMPQ and the NDX off by 1.51% and 1.62% respectively. The SPX lost 1.32%. Volume was considerably higher across the board. It was higher by 13.64% on the Nasd and 15.15% on the New York. This shows that large institutional players were selling stocks heavily yesterday. Leading stocks were hit as well with the leaders index falling 1.56% on the day. The index closed in the lower half of its trading range and volume was lower and about average. This is a new low for the current decline on both a closing and an intraday basis. The action of the market yesterday was very negative. All the major averages made new lows for the current correction and all are now below their respective 200 dma’s. In addition the 50dma’s of all the major averages are pointing down, adding to the negative picture. The leaders index continues to trade below all it short and long term moving averages and has made a new low for the move down. The relative strength line of the index also continues to live below its 50dma as quality growth stocks continue to show weakness. The very high volume showed that large institutional players were dumping stocks yesterday, a very negative sign as distribution continues to rule the market. The only good item yesterday is that the monthly Coppock continues to decline and if the market can even hold about here for a couple of months the indicator would be in a position to signal by late summer. Right now the picture is negative and while the market is likely due for some kind of bounce, there will probably be lower prices ahead. Jerry
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