Leaders Index 4-29-16

The market got hit hard again yesterday as the major averages opened weak and sold off for most of the session. A little late strength saw the major averages finish above their intraday trading lows and close in about the middle or slightly above of their intraday trading ranges. The COMPQ ended with a decline of .62% while the SPX lost .51%. The small and mid cap sectors were also lower with the RUT down .84% and the MID off by .54. The worst damage was done in the semiconductor sector with the SOX falling 2.62%. Volume was higher across the board, producing a new distribution day on all the major averages. The Count is now seven on the COMPQ and six on the SPX, a high number. They are also coming in a cluster, a negative sign. Leading stocks were lower as well with the leaders index falling .99% on lower but still above average volume. The index traded most of the session below it’s 50dma support level before closing slightly above this important moving average. I have been saying that the direction the leaders index breaks will tell us a lot about the direction of the market. It held above the 50dma on the close but most of the candle is below it for the first time since the rally began on 2/11. The charts of the major averages, especially the Nasd averages, are looking ragged. The rally is under real stress and the distribution clusters are a big warning sign. Gains should be protected and new buys done very carefully. Jerry