Leaders Index 4-20-16

The market opened higher today and worked it’s way up for most of the session. It certainly looked like it would be another strong session and with less than an hour of trading left the major averages started selling off and lost much of their intraday gains. All the major averages finished in the middle or lower half of their intraday trading ranges after some selling came in at new highs for the move. The COMPQ finished with a gain of .16% while the SPX rallied .08%. Both of these were well below their highs. Volume was higher across the board, and despite the higher closes the late weakness in both averages constituted stalling on both exchanges. This raises the distribution count to five on both major averages, an elevated level. Leading stocks were mixed on the day with the leaders index declining .83% and closing low in it’s intraday range. The relative strength line of the index also broke below it’s important 50dma support level. It is still sitting right on the confluence of it’s 9dma and 17dma, important support. This is a very difficult market to navigate. The enormous amount of money that has peen printed in the last few years and the zero or even negative interest rates are distorting markets. I believe it has extended this cycle by as much as two years. It is impossible to know how far this rally will go, but it is a dangerous time and some caution is warranted. Jerry