Leaders Index 4-12-17

The market sold off today almost from the open. After trading mostly flat for about an hour the major averages sold off into the close. The COMPQ declined by .52% on the session while the SPX lost .38%. All the major averages closed near the bottom of their intraday trading ranges, generally a negative sign. The main redeeming factor today was the fact that volume was lower across the board. This shows less selling pressure from large institutional players and there was no new distribution today. Leading stocks acted poorly as well with the leaders index losing 1.64% on lower and below average volume. The index closed low in its trading range and is closing in on its critical 50dma. This is a major line in the sand for leading growth stocks and breaking this support would indicate a broken stock or index. The relative strength line of the leaders index is also approaching its 50dma. In addition only four stocks in the IBD 50 were higher today. Overall the market is looking like it is losing steam. The leaders index looks toppy and a break of the 50dma would be very negative. The major averages are looking troublesome also. The New York averages are now under their 50dma’s and the Nasd averages are just slightly above this support level. In addition the semiconductor stocks continue to weaken and the SOX moved further below its 50dma. The market looks sloppy and the rally that began last November is under the most stress it has been in. An increased level of caution is warranted at least for now. Jerry