Leaders Index 6-29-17

The market was hit pretty hard today. The major averages opened lower and sold off most of the session. Some late strength saw them close off their lows, but the losses were still substantial. The COMPQ finished with a loss of 1.44% while the SPX declined .86%. All the major averages closed low in their intraday trading ranges with meaningful losses. Volume was higher across the board and above average on the Nasd. This was enough to produce fresh distribution days on all the major averages. Leading stocks were hit hard as well with the leaders index falling 2.01% on the day. The index traded below its important 50dma but closed above this support level. It closed in the lower half of its trading range and below its short term moving averages. Volume was higher and above average, showing that there was distribution in quality growth stocks as well as the major averages. The relative strength line of the index is also close to breaking below its 50dma. After yesterday’s bounce the market sold off harder than it rallied yesterday. The higher volume today is establishing a pattern of higher volume on declines and lower volume on rebounds. This is a bearish pattern. All the Nasd averages are below their 50dma’s and so is the SOX. New York averages and the small and mid-cap averages are holding up better, but still look weak. It is becoming more and more clear that the intermediate rally that began after the election last November is likely over. The recent weakness in tech stocks that began after the reversal on 6/9 seems to be spreading. The only strength evident today was in the financial stocks as the XLF rallied .69%. I said back on the update on 6/9 that the kind of reversals we saw often lead to a change in trend. It looks more and more like that is happening. Jerry