Leaders Index 4-23-20

The market opened higher and rallied to very solid gains. A little over an hour into trading the major averages topped out and spent the rest of the session working their way lower. A late news story about the new Gilead drug not doing well in a test saw all the major averages close at or very near their intraday trading lows. After the close a Gilead executive issued a statement saying the study was flawed. After the early gains were lost the major averages closed near unchanged. The COMPQ and the NDX declined .01% and .27% respectively. The SPX fell .05%. Volume was higher across the board. It gained 17.45% on the New York and 26.22% on the Nasd. The fact that the declines in the major averages were so small means that there was no distribution today. Leading stocks were mixed as well. The leaders index fell .98% on the day. It closed low in its trading range on higher but well below average volume. The market looked like it would rally strongly today. Not long after the open the major averages reversed and lost all their early gains. The weakness accelerated when the story on Gilead’s drug came out but it was there well before that. These kind of reversals must be watched as they can cause some short term weakness. The major averages didn’t change their charts much today. The SPX tried to get above its 50dma resistance level but couldn’t hold it when the selling came in. The Nasd averages remain above their 50 and 200dma support levels. Right now we have to see if today’s reversal leads to a pullback and how far it will go. Jerry