Leaders Index 9-1-15

The market really got pasted today. Markets in Asia and Europe sold off hard and the U. S. markets gapped down at the open. There were a couple of feeble rally attempts that didn’t hold and the major averages declined the entire day. All the major averages finished with large losses and at the lows of their intraday trading ranges. The COMPQ fell 2.94% while the SPX was off by 2.96%. Volume was higher across the board and well above average. There was distribution on all the major averages and clearly strong selling by large institutional players. Leading stocks were lower as well with the leaders index off by 2.47%, slightly less than the overall market. The index is badly broken but it is the only one we have to use right now so I will continue to use it as a proxy for high quality growth stocks that are broken along with the market. Volume on the leaders index was very slightly above yesterday’s level, so there was distribution here as well. The chart patterns on the leaders index and the major averages are showing similar patterns. The short term moving averages are turning back rally attempts. The leaders index turned back at the 9dma and all the major averages failed at their 10dma’s. A rally attempt after a big decline that can’t even get above these resistance levels is pretty weak. I see no reason to take or even hold positions right now. The futures at this writing are showing a solid rally so the roller coaster ride continues, but who knows if it will hold until tomorrow. Jerry