Leaders Index 10-27-16

The market had another rough session today. After opening higher the major averages rolled over and fell the rest of the day. The COMPQ closed with a loss of .65% while the SPX declined .30%. All the major averages ended the day at their intraday trading lows, showing little buying interest as prices declined. Volume was higher across the board and above average on both exchanges. This produced another distribution day on all the major averages. That makes three in a row for the Nasd averages. Leading stocks really got smacked today as the leaders index fell 1.60% on higher but slightly below average volume. The index closed near the bottom of it’s trading range and it closed below the critical 50dma for the first time in the chart. The relative strength line of the index continued lower and is close to breaking below it’s 50dma. The day’s action continues to darken the picture. The COMPA is now well below it’s 50dma, joining all the other major averages below this important moving average. The small and mid cap averages made new lows for the move and the charts of the major averages are looking worse by the day. Perhaps the most worrisome factor is that most of the stocks that have been the leaders all year are breaking down, many of them hard. When quality growth stocks break down in mass then it is usually a sign of lower prices ahead. Jerry