Major market averages reversed to close down yesterday after starting the day off on a strong note. The small-cap Russell 2000 Index suffered the worst damage, down -1.2% on the day, while the S&P 500 Index was down -0.41% and the NASDAQ Composite Index fell -0.28%. Volume was lighter on the NYSE but higher on the NASDAQ. While the S&P 500 and Dow avoided a distribution day, the NASDAQ Composite posted a distribution day on an outside reversal to the downside off the intraday peak.
Leading stocks were mostly weak, with industrial names like Kennametal (KMT) getting hit on volume selling today. KMT had two strong up days after posting a pocket pivot on Monday, matching its prior early November highs on Wednesday before turning tail yesterday. This illustrates the short-term swing-trading nature of this market, as well as the reality that buying on the more subtle signals within a base is much safe than attempting to buy strength. Breakout buyers would no doubt view Tuesday's action as a positive base breakout, only to be left holding the bag as KMT flipped back to the downside.
Futures are up this morning continuing the pattern of what Gil refers to as the overnight futures "auto-goose." Regardless of how weak the market might look by the close of any regular trading day, the futures have consistently been goosed to the upside overnight. This gives the market an especially erratic flavor, adding to what is essentially a trendless environment among most stocks while the indexes give the illusion of a powerful market trend.
Focus List Notes:
CAT sold off on above-average volume. The 10-dma at 143.23 serves as the nearest reference for potential support, with the 20-dema at 141.33, near the top of the prior base, next in line.
FB closed near the lows of its trading range yesterday, and well off its intraday highs, but still close up on the day as volume declined to -17% below average. The 50-dma remains the primary reference for downside support.
Market Lab Report - Premarket Pulse for Friday, December 15, 2017
|Published:||15 Dec 2017 08:55 ET|
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2019 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.