Leaders Index 9-13-16

The market took another hit today and completely reversed yesterday’s gains. The major averages opened lower and it was all downhill from there. The COMPQ fell 1.09% while the SPX declined 1.48%. Both closed at or very near the bottom of their intraday trading ranges, a sign that there was little buying interest as prices declined. Volume increased across the board so large institutional players were again selling stocks. This is now starting to look like a pattern of higher volume on the down days and lower volume on the rebound sessions. The day’s action also added a new distribution day to all the major averages. Leading stocks were hit hard as well with the leaders index falling 2.27% on lower but still above average volume. It traded below it’s 50dma but held this support level. It continues to trade below it’s shorter term 9dma and 17dma. The relative strength line of the index is also approaching it’s 50dma. The Nasd averages continued to hold their 50dma’s while the New York averages are below this support level. The character of the market seems to be changing in the last three days. After the Brexit vote both the major averages and the leaders index began a solid rally with a pretty constant advance that was pretty orderly. There was tight action on the way up. This has changed in the last few days as there is now very wide and loose action with a downtrend and a break of support. The volume has been high throughout. building distribution. Right now the rally is in serious trouble and could well go lower in the next few days. The problem is that the Fed announcement next week could put off a rate increase and restart the rally. It is a very difficult trading environment, but protecting capital is most important now. Jerry