Leaders Index 5-20-14

The market reversed yesterday’s gains with a sell off today. The major averages opened lower and traded down the entire session. A late rally brought the major averages off their intraday lows, but they still closed with substantial losses. The COMPQ led the way lower with a decline of .70% while the SPY was off by .65%. They both closed near their lows of the session while volume was higher across the board. This continued the recent pattern of declines on higher volume while rallies are on lower volume. Leading stocks also sold off on the session with the leaders index off by .97% on lower and below average volume. The index continues to work it’s way lower and is below all it’s short term moving averages. It’s important 50dma is turning down. The COMPQ continues to trade well below it’s 50dma which is clearly trending lower now. The SPY is sitting on it’s 50dma. The RUT is now well below it’s 200dma and seems to be completing a head and shoulders pattern. The market isn’t really breaking down hard and can’t seem to make any upside progress. CANSLIM is a trend following system and right now there is no trend. I see little reason to be in the market at all right now and until something develops one way or the other the sidelines is clearly the place to be. Jerry