Leaders Index 9-15-14

It was a pretty ugly day for the market. The major averages sold off hard at the open and never recovered while closing in the lower half of their intraday ranges. The COMPQ took the brunt of it with losses in tech stocks. The COMPQ was lower by 1.07% and closed in the bottom of it’s trading range. The SPY and other New York averages did better with the Dow up on the day. All the major averages are now below their short term 10 and 21dma’s. Volume was mixed, lower on the New York and higher on the Nasd. This produces a fourth distribution day for the COMPQ. Leading stocks got hit particularly hard today with the leaders index down by 2.96% on very heavy volume. Many components of the index are clearly broken and it’s important 17dma looks like a memory. There was real damage done today, particularly to quality growth stocks. I said last week that the red flags were getting bigger. The rally is in real trouble now and a defensive posture is a good idea. Jerry