Santa is losing. The market staged a negative reversal today. The major averages opened with solid gains and rallied for a couple of hours. They topped out about 9:00 and started selling off. Then news came out that the first case of the new variant in the U. S. was reported. The major averages started selling off and it continued into the close. All the major averages finished at or very near their intraday trading lows. The COMPQ and the NDX lost 1.83% and 1.60% respectively. The SPX declined 1.18%. Volume was higher across the board. It gained 1.02% on the New York and 8.13% on the Nasd. This produced a new distribution day on all the major averages and showed that large institutional players were selling stocks today. Leading stocks were again hit hard with the leaders index falling 4.57% on the day. The index closed near the bottom of its trading range and while volume was lower than yesterday it was still above average and very high. It’s a fight now between Covid and seasonality. It looks like Covid is winning. The reversal today was ugly. Everyone knew that the Omicron variant would get here but the news still caused a lot of selling. The market reacted badly to bad news. That and the strong open and weak close are indications of a weak market. It has looked like things were getting worse for over a week now and today really confirmed it. We may get bounces here and there on news, but it is hard to make the case that the rally that began with the follow through on 10/14 isn’t over. You never know for sure how things will work out, but a defensive posture is clearly called for. Don’t let recent gains be wiped out completely. Jerry
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