Leaders Index 1-5-15

The market took a real hit on the first real trading day of the new year. The major averages opened lower and sold off the entire session. Late weakness saw them all close at their intraday lows, a sign of weakness. Volume was much higher across the board, as would be expected, but it did show there was institutional selling today. The lack of a rebound near the close showed that there were no buyers at lower prices. This produced distribution on all the major averages and caused IBD to go back to a correction call, which has been a good buy signal recently. All the major averages are now below their 50dma’s, a break of important support. Leading stocks were hit as well with the leaders index falling 1.48% on higher but still below average volume. The index closed below it’s 17dma which is an important support level for quality growth stocks. With all the recent whip saw action taking positions of any kind now. Long position are not working and going short is dangerous as so many declines have been quickly reversed. I have always said that when the going gets tough the tough go to the beach. It really isn’t worth taking positions in this environment. Cash looks really good. Jerry