Leaders Index 1-24-14

The market was hit hard on Friday for the second day in a row. The major averages gapped down at the open and it was all down hill from there. The COMPQ lead the way lower with a loss of 2.15% while the SPY fell 2.09%. The small and mid cap averages were down even more. Volume was higher across the board so there was distribution on all the major averages. Major support was also broken as all the New York averages broke below their 50dma’s and the Nasd averages closed just above theirs. Leading stocks were crushed across the board as the leaders index fell 5.40% on much higher and well above average volume. The index crashed below it’s important 17dma and is not far above it’s 50dma. Very few stocks resisted the selling as only one stock in the IBD 50 was up on the session. The major averages and the leaders index both fell below important moving averages on heavy volume, a sign of real institutional selling. The last two trading sessions have been the worst in over a year and IBD went back to market under pressure. There have been many times in the last year when the market looked like it was going to go into a correction only to see it turn around quickly and go on to new highs for the move. The major averages are still only a few percentage points from their recent highs and could rally back again. The damage of the last couple of days had been more severe than we have seen recently and if the market doesn’t rally back quickly and with real conviction then the rally is likely over. Jerry