Leaders Index 4-7-16

The market reversed yesterday’s reversal and lost everything it just gained. The major averages opened lower and sold off the entire session before some late buying brought them off their lows. The COMPQ lost 1.47% while the SPX fell 1.20%. They both finished at or near their intraday lows. Volume was higher across the board, showing increased selling by large institutional players. This combined with the price decline produced distribution on all the major averages. This increases the level of distribution to worrysome levels. Leading stocks were hit as well today, but not as much as the overall market. The leaders index declined .86% on the day and closed in the lower half of it’s intraday trading range. Volume on the index was lower and well below average so there was no distribution in leading stocks. The index finished just above the important 17dma. It is now testing this support level. The best leaders rise above this important moving average. If the leaders index breaks below this support, particularly on high volume, it will be a big negative. Today was the sixth distribution day on the COMPQ and IBD went to an under pressure call. This along with the yellow flags of the A’s minus E’s and the Summation Index I spoke of a few days ago raises the level of concern. Jerry