Leaders Index 3-18-20

The selloff resumed today. The major averages opened lower and wiped out all of yesterday’s gains. There was consistent weakness until late in the day when prices rallied off their lows. The losses were still substantial with the COMPQ and the NDX falling 4.70% and4.00% respectively. The SPX lost 5.18%. The major averages all closed in the upper half of their intraday trading ranges, a good sign. Volume increased a lot across the board. It rose 6.77% on the Nasd and 18.97% on the New York. This shows that large institutional players were still dumping stocks. Leading stocks were hit also with the leaders index falling 7.83% on the day. It closed high in its trading range on higher and above average volume. The weak action continued and the major averages made new intraday lows for bear market. There were real signs of stress in the credit market today as even high quality short duration credit instruments taking large losses. Liquidity is not there right now, however the Fed is taking action to prevent this health crisis from becoming a real financial crisis. The bottom line now is that we don’t know where the bottom will be and it is nowhere in sight now. We are basically going to have to shut down the country for a month or two to stop the spread of the virus and then revive the economy. The government is taking some good actions to accomplish this and hopefully the virus can be contained before it does even more damage. Right now the sidelines are the place to be. Jerry