Leaders Index 1-30-17

The market sold off today from the open. There were several reasons given for the decline ranging to possible delays in tax cuts to immigration policies to missile tests by Iran. The major averages sold off hard at the open and developed some significant losses. They bottomed out about an hour and a half into trading and worked their way higher into the close. Much of the losses were recovered, but all the major averages finished with meaningful losses. The COMPQ closed down .83% while the SPX declined .60%. They all closed high in their intraday trading ranges, a good sign, but the losses were the worst of the new year. Volume was higher across the board and about average on both exchanges. This was enough to produce a fresh distribution day on all the major averages. Leading stocks were lower as well with the leaders index losing .69% on the session. The index traded below its short term 9dma at the lows but recovered to hold this moving average. The index closed near the top of its trading range, a sign of support. Volume was higher than Friday but below average. This produced a distribution day on the leaders index as well. Today’s session was the biggest sell off since the post-election rally began. The charts of the Nasd averages look the best as they are holding above their short term 10dma’s. The New York averages look worse as they have fallen back into the consolidation ranges they broke out of last week. This is not what you want to see. The damage done today was not enough to really change the picture, but it is a red flag. If we get many more trading session like this the rally will be in danger. Jerry