Leaders Index 5-1-20

The market took a pretty good shot yesterday. The major averages opened lower and worked their way down for the rest of the session. All the major averages closed at or very near the bottom of their intraday trading ranges, showing little buying interest as prices fell. The most damage was in the Nasd averages as the COMPQ and the NDX fell 3.20% and 3.14% respectively. The SPX lost 2.81%. The small and mid-cap stocks were hit hardest with the RUT declining 3.83% and the MID off by 3.39%. Volume was lower across the board. It declined 9.83% on the Nasd and 20.68% on the New York. Leading stocks were lower as well with the leaders index falling 2.23% on the day. The index closed in the upper half of its trading range on lower and below average volume. The index broke below its short term 9dma but held its 17dma. The market sold off pretty hard on a price basis yesterday, but volume didn’t confirm the selling. The fact that volume was lower shows that large institutional players were not selling stocks heavily and that there was no new distribution yesterday. The leaders index broke below its short term 9dma but held its important 17dma, so the chart doesn’t look to bad. The lower volume was also an encouraging sign. The major averages are still above their most important support so their charts still look ok. The distribution count remains low. The weekly Coppock didn’t turn up last week, showing that there is still not a lot of power in this advance. It may turn up next week if the price action is strong, but we will have to wait and see if that happens. The market is struggling a bit and the major averages are at least taking a break. The weight of the evidence currently still points to higher prices ahead, but if there is no weekly Coppock confirmation the chances of a really powerful rally that produces large gains in individual leading stocks and the major averages is much less. Jerry