Leaders Index 9-27-19

We had another negative session today. The major averages opened higher, but it only lasted five minutes. They started to decline after that, and really sold off hard on reports of additional restrictions on investment in China. All the major averages went to real losses before a little late buying allowed them to close off their lows. All the major averages closed low in their intraday trading ranges, a negative sign. The Nasd averages took the worst of it with the COMPQ and the NDX falling 1.13% and 1.16% respectively. The SPX lost .53%. Volume was higher across the board, by 7.90% on the Nasd and 4.99% on the New York. This combined with the price declines produced a new distribution day on all the major averages. Leading stocks were hit even harder than the overall market. The leaders index fell 2.98% and closed near the bottom of its trading range. Volume was higher and a touch above average. This shows heavy selling pressure in quality growth stocks. The picture darkened a lot today. I had said previously that the lines in the sand were the old highs on the upside and the 50dma’s on the downside. The downside seems to have won. The Nasd averages are below their 50dma’s and the SPX tagged it today but held above this important moving average. The action in leading stocks has been much worse. The leaders index made a new low for the move and now has a clear pattern of lower highs and lower lows. It is living below its 50dma and the short term 9dma and 17dma have joined the index below the 50dma. The relative strength line of the leaders index is also at new lows. In this news driven environment the market could always turn up, but it sure looks like the market wants to go lower. Jerry