Leaders Index 3-5-20

The ping pong game continued today as yesterday’s gains were mostly reversed today. The fears of the coronavirus took center stage today as the major averages opened lower and after a weak rally attempt sold off for the remainder of the session. All the major averages finished close to their intraday trading lows. The declines were pretty evenly divided. The COMPQ and the NDX lost 3.10% each. The SPX declined 3.39%. Volume was higher across the board. It gained 3.70% on the Nasd and 9.66% on the New York. This continues the pattern of high volume declines and lower volume rebounds. Leading stocks were hit as well. The leaders index fell 1.49% on the day. The index closed in the lower half of its trading range and remains below the short term 9dma. Volume was higher and above average. The market continued its high volatility whip saw action. Almost all of yesterday’s large gains were lost today as the focus shifted from politics to the coronavirus. The COMPQ continues to decline below its short term 10dma while the SPX is now back below its 200dma. The action of the market has been very poor. We continue the pattern of high volume declines and lower volume rebounds. This is a negative volume signature and shows that large institutional players are distributing stocks. The major averages have shown no ability to rally solidly after the recent decline. That usually shows a market that wants to go lower. The extreme volatility makes it impossible to make progress for any but the most short term traders. It is beginning to look like the top we just saw may well be more important than we originally thought. Jerry