Leaders Index 6-29-15

For all intents and purposes Greece defaulted today and markets around the world took hits. The major averages gapped lower at the open and after a failed fifteen minute rally attempt continued declining for the rest of the day. The COMPQ fell 2.40% while the SPX declined 2.09%. Both closed at their intraday lows and volume was above average. It was lower than Friday because of the Russell rebalancing. All the major averages are now well below their 50dma’s and a couple of the New York averages fell below their 200dma’s. Leading stocks were hit much harder than the overall market. The leaders index fell 3.16% on higher than average volume, although it was lower than Friday’s artificially higher volume. The chart clearly looks broken as the index traded below it’s 50dma during the session before closing above this important moving average. The index closed low in it’s intraday range, showing that there was little buying when the component stocks declined. Four trading days ago the index fell below it’s 17dma, indicating that quality growth stocks were losing steam. The 9dma has now crossed below the 17dma. Leading stocks are mostly broken after this decline. For over a year every time the market has looked like it was going to have a correction it has turned around and rallied. It may do that again if there is another kick the can down the road deal with Greece, but things are looking dangerous now and a defensive posture is warranted. Jerry