Leaders Index 2-5-26

The market selloff continued today as the market suffered real losses again. The major averages opened lower and it was mostly downhill from there. A couple of weak rally attempts quickly failed and all the major averages finished low in their intraday trading ranges. The COMPQ and the NDX fell 1.59% and 1.38% respectively. The SPX declined 1.23%. Volume was lower across the board. Leading stocks were hit hard as well. The leaders index fell 2.67% and closed low in its trading range. Volume was lower and the index broke below its 17dma. The market continued lower today. It is pretty clear that we are in a correction right now, the thing now is how far will this correction go. Most corrections are minor and are in about the 4% to 8% range. Once a drawdown goes past 8% the likelihood of an intermediate correction is high. The fact that virtually everything is getting hit seems to point to at least an intermediate correction. The leading stocks have held up fairly well, but now they are getting hit as well(full disclosure, I sold the basket of leaders index stocks I owned today). Now the question of how far this will go is paramount. We can’t know that yet, so a very defensive posture is called for. Jerry