Leaders Index 10-10-25

The market took a real hit yesterday after Trump announced tariffs on China in retaliation for restrictions on rare earths exports. The market sold off hard on the announcement. After opening a bit higher the major averages sold off hard on the tariff announcement. The selling lasted all day and all the major averages finished near their intraday trading lows. The COMPQ and the NDX fell 3.56% and 3.49% respectively. The SPX declines 2.71%. Volume was higher across the board, producing distribution on all the major averages. Leading stocks took a hit as well. The leaders index fell 3.98% on the day. The index closed near its lows of the day on higher and about average volume. The market took a real hit yesterday on the tariff news. It started out alright but sold hard and consistently once the news came out. Real damage was done to the rally yesterday. All the major averages broke through short term moving averages that have generally held since the rally started. The picture changed yesterday. This selloff was caused by a new event, so now the question is weather this is the end of the rally or just a bump in the road. The action of the market next week will tell us. There must be a strong a solid recovery next week, hopefully early next week, to keep this rally going. If there isn’t the rally will be in serious question. Next week starts earnings season and the numbers are expected to be good. Right now protecting profits should be the main concern until proven otherwise by the market. Jerry