Leaders Index 12-1-14

After working it’s way higher over the holiday week the market had a pretty ugly session today. The major averages went into new high ground for the move on Friday, but sold off early today and never recovered. The COMPQ led the way down with a loss of 1.34% while the SPY was lower by .68%. All the major averages finished near their intraday lows, showing that there was no late buying. Volume was higher across the board. This is to be expected after a holiday shortened session on Friday, but it was stronger than any volume last week and was above average on the New York. This looks like large institutional players were selling stocks. The COMPQ closed right on it’s 10dma while the SPY closed below this short term moving average. There was distribution across the board today so there are now three distribution days on the COMPQ and two on the SPY. Distribution on the Nasd is starting to build. Leading stocks did much worse than the overall market with the leaders index declining 2.26% on higher and slightly below average volume. The index broke above it’s recent consolidation last week as quality growth stocks showed some relative strength, but the index fell back into the consolidation zone today. It is holding it’s important 17dma and a break below this support level would be negative. Only four stocks in the IBD 50 were up today. Another sign that we are very late in the current cycle is the fact that we had a Hindenburg Omen signal today. This says that we are in a bifurcated market, but that has been seen by the fact that the major averages are leading a rally that is very narrow and is dominated by large cap stocks. The warning signs are building and positions should be kept on a shorter leash. Jerry