Leaders Index 3-23-17

The market opened fairly strong today as all the major averages posting solid gains early. The rally didn’t last as the major averages topped out a little less than two hours into trading and reversed sharply. Some of the blame for this seems to be concern about the passage of the health care bill as the House postponed the vote. After having nice gains the COMPQ finished with a loss of .07% and the SPX declined .11%. Volume was lower across the board. All the major averages closed at or near the bottom of their intraday trading ranges due to late selling. Leading stocks were higher on the session but also closed well off their highs. The leaders index closed with a gain of .67%, but could not close above any of its short term moving averages. The declining 9dma is close to breaking below the flattened out 17dma. Volume on the index was lower than yesterday and well below average. The chart of the leaders index is starting to take on a wedging look. It has rallied for two consecutive days since Tuesday’s sell off on successively lower volume. The market tried to stage a decent bounce today but couldn’t. The reversal of early gains is a negative sign and the markets inability to stage any kind of convincing rebound is troubling. Early leaders, like the financials, are breaking down on volume and the distribution count is high. The picture is darkening and unless the market can stage a rally with some conviction the post-election rally will be in trouble. Jerry