Leaders Index 4-7-20

The market started out strong today in a continuation of yesterday’s strength. The major averages gapped up at the open and were all up over 3% at the highs. Those highs came in the first five minutes of trading and the major averages started selling off from there. The decline continued into the close and all the major averages finished at their intraday trading lows and in negative territory. The COMPQ and the NDX fell .33% and .40% respectively. The SPX was off by .16%. Volume was higher across the board. It was up by 7.74% on the Nasd and 12.17% on the New York. The COMPQ’s decline combined with the higher volume produced a distribution day on the Nasd averages. The SPX missed a distribution day because the decline was only .16%. Leading stocks followed the pattern of the overall market but they closed in positive territory. The leaders index was higher by 1.04% but closed low in its trading range. Volume was higher and above average. It looked like the market would build on yesterday’s rally, but it didn’t last. The major averages reversed lower and sold off into the close, finishing at the lows of the session. The higher volume showed that large institutional players were selling stocks today. The Nasd averages had a distribution day the day after a follow through. The SPX missed distribution by a small amount and has not had one yet. A distribution day right after a follow through is usually a sign that the follow through will fail. We will have to see where this goes, but today’s action was very negative. Strong opens and weak closed are not the sign of a healthy market. Jerry