The market got hit pretty hard today. Spiking numbers of positive Covid cases in Europe and the U. S. are igniting fears of a second wave. Also the prospects of a stimulus deal look bleak. The major averages opened lower and mostly sold off the rest of the day. Some late strength saw the major averages close off their lows, but they all still finished in the lower half of their intraday trading ranges. The COMPQ and the NDX lost 1.64% and 1.61% respectively. The SPX declined 1.86%. Volume was higher across the board. It gained 7.84% on the New York and .79% on the Nasd. This was enough for a new distribution day on all the major averages. Leading stocks were lower as well with the leaders index falling 1.72% on the day, about in line with the overall market. Volume increased, showing selling in quality growth stocks. The index closed in the lower half of its trading range and is below its 17dma. The action today was negative. The fading hopes for a stimulus package and fear of increasing Covid cases caused a real sell off. The market has been struggling recently and this is a real blow to the rally attempt. The SPX and the NDX closed just below their respective 50 day moving averages. The COMPQ traded below this important support level but closed above it. The current upturn is in real trouble now. There must be a solid upturn quickly of the picture will darken further. The COMPQ in particular must rally or it will start to look like a double top in this important major average. There are a slew of earnings reports coming out later this week on important companies. This could cause some volatility. The run up to the election next week is also a big unknown. The follow through on the COMPQ we recently saw has clearly failed. The earlier follow through on the Dow is in real danger. Right now, pending the outcome of the election, it looks like the weight of the evidence points to lower prices. Jerry
Reply With Quote