Leaders Index 8-17-17

It was a really ugly session today. The market opened weaker and it was all downhill from there. The COMPQ led the way down with a loss of 1.94% while the SPX fell 1.54%. All the major averages closed at their intraday trading lows, a sign that the selling was there throughout the day. Volume was higher across the board, showing that large institutional players were selling stocks. This produced a new distribution day on all the major averages, and the count is high, especially on the Nasd averages. Leading stocks sold off along with the overall market. The leaders index was off by 1.99% on the day, about in line with the Nasd averages. The index closed in the lower half of its trading range, but above the lows. Volume was much higher than yesterday and well above average. This shows distribution in quality growth stocks as well as the market. The chart of the leaders index though doesn’t look to bad as it remains above even its short term 9dma. The rally that began after the election last November is based on a pro growth agenda being passed in Washington. With the current problems and questions about whether that will happen or not the market is now reacting negatively. That news combined with the terrorist attack in Spain was enough to cause a serious sell off. All the major averages are now back below their 50dma’s. About the only positive thing you can point to right now is the chart of the leaders index. It is holding up pretty well considering. Everything else points to a market that is going lower. If the major averages don’t quickly recover their important moving averages we will likely see lower prices that will eventually take the leaders with them. Jerry