The market got slammed again yesterday. The major averages gapped down at the open and it was mostly downhill from there. Some late buying came in and the major averages closed off their lows, but still with substantial losses. All the major averages finished in the upper half of their intraday trading ranges, but the opening gap down accounted for much of the losses. The COMPQ and the NDX fell 1.80% and 1.66% respectively. The SPX lost 1.72%. Volume was higher across the board. It gained 22.36% on the New York and 4.5% on the Nasd. Leading stocks were hit as well with the leaders index off by 2.27% on the day. The index closed high in its trading range but still had substantial losses due to the opening gap down. Volume was higher and slightly above average and both the 9dma and the 17dma broke below the 50dma. The weak action continued yesterday with the overall market and leading stocks both getting hit hard. Some late buying mitigated the losses, but they were still large. The major averages are now very close to their June lows and there appears to be little reason to believe they will hold. If they don’t there is little support in the charts and the market could go a good deal lower. The COMPQ is down more than 30% from its highs and much more weakness could take it to the minus 40% level that I use to mark a bone cruncher bear market. The Fed signaled more big rate increases before the end of the year and the market is finally realizing that there will not be a Fed pivot to lower rates anytime soon. That is reflected in the big sell off we have seen. The bear isn’t over and while we may be oversold in the short term and could see a bounce, we have not seen the bottom of this bear market. Jerry
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