Leaders Index 4-27-15

The market started off strong with the major averages showing solid gains early. That lasted about a half hour and then the major averages reversed and sold off for the rest of the session. This kind of a reversal after making new highs is a bad sign. The COMPQ led the way down with a loss of .63% while the SPX fell .41%. All the major averages closed at or near their intraday lows. Volume was higher across the board and above average on both exchanges. This produced distribution on all the major averages. Leading stocks had an even worse session. For the last three days of last week quality growth stocks were starting to break down, and it continued today. Last week it was the semiconductor stocks that got hit, today the cyber security and biotech stocks joined the party. When high quality leaders sell off hard it is a very negative sign. The leaders index took a big hit today, declining 3.97% on very heavy volume. This showed that large institutional players were selling leading stocks. A lot of the decline was due to AKRX, which fell 21.98% on very heavy volume, but there were many other stocks contributing to the loss. AMOT fell 13.47%, CBM declined 5.12%, VRX fell 3.99%, CNC was lower by 3.91% and EIGI was off by 3.77%. All declines on very heavy volume. This many stocks breaking down, especially in a new leaders index is a huge red flag. We must see quality growth stocks rally hard and soon or the market is in real trouble. For now lightening up is probably a good idea. Jerry