Leaders Index 7-6-17

It was an ugly day all around today. After gapping down at the open the major averages tried to rally during the session but that attempt failed. Selling pressure came back in and the major averages declined into the close and finished at or very near their intraday trading lows. The COMPQ fell 1.00% while the SPX declined .94%. Volume was higher and close to average on the Nasd while it was very close on the New York. Esignal had New York volume slightly lower. This was enough to produce a new distribution day on the Nasd averages. I will let IBD decide if there is fresh distribution on the New York averages. Leading stocks were hit today, but maybe not as hard as the overall market. The leaders index was off by .85%. slightly less than the major averages. The index closed low in its trading range and volume was lower and below average. There was no distribution in the leaders index. I said yesterday that the more often the index tests its 50dma support level the more likely that it would break below it. That happened today as the index broke below its 50dma and closed below it. That important moving average is now resistance. The Nasd averages and the SOX continue to move further below their 50dma’s. Today the SPX became the first of the New York averages to join them. This is a very negative development. The weekly Coppock on the COMPQ has been flattening out for a couple of weeks now and it looks like it will give a clear cut sell signal this week. The is looking more and more like there will be a more meaningful correction now than we have seen in a while. The intermediate term rally that began after the election looks like it has run its course. It is impossible to know how far this sell off will go or if there will be a turn around like we have seen in the past. The direction of the market appears to be down for now. Jerry