Leaders Index 3-24-17

It was a wild ride yesterday. The market opened strong and it looked like it could be a rally day. After about an hour and a half into trading there was a nasty reversal and the major averages went on to significant losses. A little late strength saw the market close off its lows. The gyrations were mostly caused by the action in the House on the health care bill. The major averages were mixed with the Nasd averages in the lead. The COMPQ was higher by .19% while the SPX declined .08%. All the major averages closed low in their intraday trading ranges, a sign of weakness. Volume was also mixed, higher on the Nasd and lower on the New York. This combined with the low close on the COMPQ was enough to produce a stalling distribution day on the Nasd averages. Leading stocks were higher with the leaders index gaining .61% on higher but below average volume. The index closed in the lower half of its trading range and is sitting right below a confluence of its short term 9dma and 17dma. The hurdle now for the leaders index is to break above this resistance, hopefully with some conviction. If it can’t then it will likely head lower. The rally that started after the election is facing some real stress now. The New York averages are flirting with their 50dma’s and a break below this important moving average would be very negative. The Nasd averages are acting better but they too must show some more strength. The A’s minus E’s, after a brief turn up have now turned lower again. The weekly Coppock turned down last week for the first time since it gave a buy signal in the third week of November. The decline was too small to be an official sell signal but unless there is strength next week we will likely see that happen next week. We are at something of an inflection point right now where the market could go either way. The rally is under the most stress it has been in since the election and any further weakness from here would probably end it. Jerry