Leaders Index 3-16-20

Today was really bloody. The Fed took emergency measures over the weekend by cutting rates 100 basis points and restarting QE in a pretty big way. It didn’t help. The market gapped lower at the open and there were trading curbs almost immediately. After they came off the major averages mostly traded close to those levels before a weak close. The losses were large and across the board. The COMPQ and the NDX lost 12.38% and 12.32% respectively. The SPX declined 11.98%. All the major averages closed at or near their intraday trading lows, a sign of weakness. Volume was mixed. It was higher by 6.05% on the Nasd and lower by 3.42% on the New York. Leading growth stocks were crushed as well with the leaders index falling 12.89%, about in line with the major averages. The index closed low in its trading range and made new lows for the decline. Volume was lower but above average. The market continues to sell off in a panic fashion. After gapping lower the major averages went on to produce one of the biggest daily declines in history. We don’t know where this situation will end up so the uncertainty is causing people to dump anything they can to raise cash, likely for margin calls. This forced selling has been going on for a while now. This bear market is on the verge of becoming a real bone cruncher. I define that a bear of 40% or more. Thankfully they are rare, but we are not far away from one. The bottom line right now is that it is not time to try to figure bottoms or even rally days leading to follow throughs. Most fail in bear markets. The objective now can be summed up in one word, survive. Live to fight another day. Fortunately in the stock market you can do that by getting out of the way. On the other side of this, and there will be another side, there will be a great buying opportunity. Be sure you are there to take advantage of it. Jerry