Leaders Index 4-11-16

The market had a nasty reversal today. There was a strong open and the major averages built up solid gains. It lasted for forty minutes and then the major averages began a sell off that lasted the rest of the session. The COMPQ lost .36% while the SPX fell .27%. All the major averages finished at or very near the bottom of their intraday trading ranges, a sign of a lack of support. Volume was mixed on the day, higher on the New York and lower on the Nasd. This produced distribution on the New York averages, making the total for the SPX four. Leading stocks were a bit weaker than the overall market with the leaders index falling .54% on the day. Volume was lower than Friday but was still pretty strong. Almost average when most days in the last couple of weeks have been well below average. The index closed near it’s low of the session and is now slightly below it’s support at the 17dma. Breaking below this level is important as the index hasn’t traded below it since last January. Today’s break of the 17dma looks more like it is in the context of a consolidation pattern than a strong break. We must see the index rally with some conviction quickly or it will be in serious trouble. The COMPQ continued to decline further below it’s 200dma while the NYA has not been able to retake this important moving average. The rally that began in the middle of February is clearly struggling. Earnings season, which began today, should have a strong effect on the near term direction of the market. Jerry