Leaders Index 9-25-17

The market took a hit today with big tech stocks leading the way. After opening lower the major averages traded in negative territory the entire session. The Nasd averages led the way lower with the COMPQ and the NDX losing .88% and 1.10% respectively. The New York averages held up better with the SPX lower by .22%. The New York averages closed slightly in the upper half of their intraday trading ranges while the COMPQ finished near the bottom of its trading range. Volume was higher across the board, producing a fresh distribution day on all the major averages. Leading stocks got hit harder than the overall market with the leaders index falling 2.30% on the day. The index closed low in its trading range and violated its important 17dma support level. Volume was very high as there was heavy selling in leading stocks. This is the kind of session that raises a lot of red flags. Quality growth stocks, especially big cap tech stocks that have been the best performers, were hit hard on heavy volume. This shows that large institutional players were selling stocks. Many leading stocks that have had recent breakouts fell hard. The best example is BABA. After being one of the best performers this year the stock formed an ascending base and broke out on 9/13. Today it broke back below its pivot point. When stocks like this have possible late stage base failures it can bode ill for the market. The COMPQ declined right to its 50dma and closed right on it. If this important average breaks below this support level it will be very negative. We need to see some positive action in both the major averages and leading stocks soon. One day’s action usually doesn’t spell the end of a rally, but today was very negative. jerry