Leaders Index 1-4-16

The market did not get off to a good start in 2016. After a big decline overnight in China and increased tension between Saudi Arabia and Iran, the market followed European markets and gapped lower at the open. The major averages traded sideways most of the remaining session before some late strength near the close allowed then to finish off their lows. The losses remained substantial as the COMPQ declined 2.08% while the SPX fell 1.53%. The Nasd averages showed the most late strength, closing near their intraday trading highs while the New York averages closed in the lower half of their intraday ranges. The averages representing the small and mid cap stocks closed near the bottom of their intraday ranges. Volume increased dramatically across the board and was well above average. This produced distribution on all the major averages and sent them crashing below important moving averages that were providing some support. IBD changed it’s call to a correction. Leading stocks were hit harder than the overall market with the leaders index falling 2.45% on much higher and above average volume. The index closed in the upper half of it’s intraday range but still broke below it’s important 9 and 17 day moving averages. It was an ugly session all around with the mega cap stocks that have been leading the advance taking large hits. The charts of the major averages are looking really bad and it is hard to find much to be positive about right now. Jerry