The market sold off hard today . All the major averages opened lower after the market in China fell 8.5%. The COMPQ fell .96% while the SPX declined .58%. Both closed at their intraday lows, so there was no late support. IBD had volume lower on both exchanges, although esignal showed higher volume on the New York. The SPX closed just above it’s 200dma while the COMPQ broke below it’s 50dma. Leading stocks were hit more than the overall market as the leaders index fell 2.13% on higher and well above average volume. The fact that the index closed off it’s lows is about the only positive thing you can say. The index broke below it’s important 17dma for the first time, a very negative sign. The index has now had three days in a row of declines on increasing volume. This shows that there is real selling pressure in quality growth stocks. The charts of the major averages are looking really ugly. The Dow is now well below it’s 200dma while the SPX is sitting on this moving average. Small and mid cap stocks are getting hit as well as the MID is now well below it’s 200dma and the RUT is right on it’s 200dma. There isn’t much good you can say about recent market action. The breakout into new high ground on the Nasd averages was clearly a fake out. It is dangerous to short the market as there have been many rebounds when it looked like things would really get going on the downside, but the market is looking worse than it has in a long time. Jerry
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