Leaders Index 12-11-13

The market got slammed today. The major averages opened lower and traded down the entire session and a late sell off caused them to close at their lows of the day. The SPY and the COMPQ broke below both their 10 and 21dma’s while the NYA is sitting right on it’s 50dma. The COMPQ lead the way down with a loss of 1.40% while the SPY fell 1.13%. The small and mid cap averages were hit even harder. Volume increased across the board and was above average on the Nasd. This produced another day of distribution on all the major averages. Leading stocks got hit worse than the overall market as the leaders index fell 2.45% on lower and slightly below average volume. The index continues to sink farther below a now declining 17dma and the RS line of the index is approaching it’s 50dma. This type of action shows the difficulty of trading this late in a cycle. Gains built up over weeks can disappear in a day. The rally is now clearly in trouble and it is likely that IBD will at least go to market under pressure. The market must turn around quickly and with volume or the rally may well be over. Further weakness from here will likely be fatal. Jerry