Leaders Index 6-11

The market got hit hard on the opening in response to weak markets abroad. The major averages attempted a rally starting about ten minutes into the opening and got back to break even before the selling started again and took the major averages down again. They finished near their lows of the day with losses slightly in excess of one percent on the session. Volume was higher across the board so there was distribution everywhere. Leading stocks were weak as well with the leaders index dropping 1.58% on lower volume. This brought the index back below it’s 17dma. The distribution count is now seven on the SPX and five on the COMPQ. This is to high a level to ignore and IBD went to market in correction. All the major averages and the leaders index now have well defined downtrends with declining tops lines on all the averages. We will have to watch to see if they take out their recent lows and reinforce the trend of lower lows. The trend now looks like it is clearly down and cash or short is the place to be. Jerry