Leaders Index 6-23-23

The market continued its corrective action yesterday. The major averages opened lower and after a pretty feeble rally attempt sold off into the close. All the major averages finished in the lower half of their intraday trading ranges. The Nasd averages were the weakest with the COMPQ and the NDX falling 1.01% and 1.00% respectively. The SPX declined .77%. Small and mid-cap stocks were even worse. Volume was higher across the board, caused by a Russell rebalancing that occurred yesterday. This still led to a distribution day on all the major averages. Leading stocks sold off as well with the leaders index declining 2.43% on the day. The index closed in the lower half of its trading range on higher and above average volume. The pullback in the market continued yesterday. So far it looks pretty orderly as the price declines have been moderate and volume has mostly been average or less. Yesterday’s action was distribution but the Russell rebalancing distorted the numbers. The overall distribution count is still moderate. The recent corrective action appears to be pretty normal and likely still has a bit to go. The leaders index fell below its 17dma on Friday, which is a warning sign for leading growth stocks. The other short term indicators I look at are also headed lower. I expect this correction to go on a bit longer, but the intermediate to longer term trend remains higher. Jerry