Is the Tide of the Stock Market Turning Bearish? $SPY $QQQ $QLD
It can be easily said that Friday’s action was simply ugly. This leaves one to question if a long over due correction could be at hand. I want to clarify I am not a bull nor a bear. I simply read the market action every day. The stock market opened lower and it just kept on going down. The major averages finished near their intraday lows, a sign of weakness. The declines were about equal with the COMPQ down .53% and the SPY off by .60%. Volume was higher across the board so there was distribution on all the major averages. Currently we have 3 distribution days on both the Nasdaq and the SP500. More than 4 and clustering of distribution days are a big negative. You never know how hard the market can fall. Distribution days are signs that institutions are selling. They are the leading forces in the market.
The Nasdaq average are holding up better than other indexes. The New York averages look weakest as the $NYA is now below it’s critical 50dma while the SPY is fractionally above this moving average. Leading stocks were generally weaker as well but held up a little better than the overall market. The Russell index fell more than 1% which is very negative. Overall there were 15 losing stocks for 4 winning stocks another sign of negative breadth. Interest rates are starting to move upwards 10yr 2.61%. Potentially this could be another nail on the coffin.
However …and a big however must take it day by day. Anything can and will happen in the stock market.
In order to repair the recent damage we need a strong rally with heavy volume quickly to show that large institutional players are supporting the market. Personally I am still long…but with one more distribution day….I will be personally tightening up the hatches. If you want to learn how to become a better trader I offer one on one private mentoring.
The above is solely for educational purposes. No personal information is given. Consult a licensed professional for your investment decisions…see full disclosure…