The market sold off today as oil prices rose. The major averages opened lower and worked their way down the rest of the session. All the major averages finished low in their intraday trading ranges. The COMPQ and the NDX fell 1.78% and 1.73% respectively. The SPX lost 1.52%. Volume was higher across the board, producing a new distribution day on all the major averages. Leading stocks were hit hard as well. The leaders index fell 3.63% on the day. The index finished low in its trading range on higher but well below average volume. The market sold off today, mostly on a large increase in oil prices. The losses were significant and across the board. Right now the market is clearly in a correction. The vast majority of corrections or pullbacks are minor and show moderate losses. 8% is the cut off between a minor pullback and something worse. Once it gets past this level the chances are good that it gets worse, with an intermediate correction a real possibility. Right now the COMPQ is down just shy of 7%. The major averages remain in a sideways action that goes back to early November of last year. In the last few weeks it has taken on a downward pattern. Right now the course of the war and oil prices will be the most important factors in determining prices, which will cause volatility. There could be a follow through caused by volatility, and the major averages could remain in the sideways action we have seen recently. Right now I think the weekly Coppock is a more important signal than a follow through. Jerry
Reply With Quote