Leaders Index 4-25-14

The market got hit pretty hard yesterday. After gapping down at the open the major averages were lower all day and finished near their lows of the session. The COMPQ led the way down with a loss of 1.75% while the SPY was down .81%. Small caps got hit even harder with the RUT off by 1.86% an the MID lower by 1.18%. Volume was mixed on the session, slightly lower on the Nasd and slightly higher on the NYSE. This produced distribution on the New York averages. Leading stocks got hit even harder than the overall market with the leaders index lower by 2.70% on volume lower than Thursday but still well above average. The index is now back below it’s important 17dma and is now again sitting on it’s 50dma. When you break an important moving average and then rally above it but can’t hold the gain it is a real sign of weakness. If the index breaks below the 50dma, particularly with volume, the leaders will be broken. The continued weakness is taking it’s toll on the charts of the major averages, especially the Nasd averages. There are clear declining tops patterns on the COMPQ and the NDX. Also there are head and shoulders topping patterns almost in place on these two averages. A break below the neck lines will complete the patterns. It is hard to see much of anything to be positive about. Even the energy related issues that were doing well took hits yesterday. As I have said recently this is a very difficult market to make any progress in. Until there is a clear trend in either direction playing this market will likely just get you chewed up. The beach is nice right now. Jerry