Leaders Index 6-20-17

The market staged a nice rally yesterday with the greatest strength being in the tech stocks that have lagged since the reversal a week ago Friday. The price gains yesterday were strong, but the volume left a bit to be desired. Today the market didn’t follow through on yesterday’s gains. After opening lower the major averages spent the rest of the session working their way lower. The COMPQ finished with a loss of .82% while the SPX declined .67%. The greatest losses were in the semiconductor stocks as the SOX fell by 1.20%. All the major averages, and most of the secondary averages, closed at or very near the bottom of their intraday trading ranges, showing some selling pressure. Volume was higher across the board. It was much higher and well above average on the Nasd and just slightly higher on the New York. This showed that large institutional players were selling stocks and added a fresh distribution day on all the major averages. Leading stocks did well yesterday with the leaders index rallying above its short term moving averages. Today it gave back those gains and closed with a loss of 1.41%. The index is sitting right on a confluence of its 9dma and 17dma. Volume was lower than yesterday so selling in these quality growth stocks was moderate. After yesterday’s action it looked like the market might regain its footing as it has many times in the recent past. The semiconductor and Nasd tech stocks that got hit in the reversal and lagged since showed life. Today’s action brings that into some question. The New York averages continue to act pretty well and the Nasd averages are struggling. The increase in volume today was a negative sign. The Nasd averages, along with the small and mid-cap stocks, must catch up and move into new high ground or there may not be a continuation of the rally this time. Jerry