Markets Put In Negative Reversal
The markets were rallying early in the day, but then sold off into the closing hours. Now you know why I say that I prefer it when the market opens weak.
Both major indexes put in negative reversals today, with the COMP actually putting in an outside day. As for the SPX, it is still above its 50-day, so we will have to watch for potential support.
Volume rose a bit today, which qualifies as a distribution day. And we never did get a true follow through day to the rally on 7/18. So this latest rally attempt really needs to prove itself.
In all the years I have been trading, I think this has to be the most volatile earnings season I can remember. Especially for companies who report so-so earnings and give cautious guidance. Stocks for those companies have been totally trashed. Did you see UPS, AMZN, NVT, AET, PLXS, KNDL? And I can name two dozen more.
It has been brutal, but I suspect that as earnings season winds down, smart investors will pick through the rubble and find those stocks that don't deserve to be down as much as they are. It seems everyone is a technician these days, and as soon as a stock breaks a little, the herd runs for the hills. What ever happened to buy low, sell high?