Leaders Index 10-21-16

The market had another fairly unimpressive trading session yesterday. The major averages sold off at the open and spent the rest of the day working their way higher. The Nasd averages were the strongest with the COMPQ gaining .30% while the SPX was pretty much flat with a loss of .01%. All the major averages finished at the top of their intraday trading ranges, a sign of support. Volume was mixed, lower on the Nasd and higher on the New York. The lower volume here was on the major average that did the best. Leading stocks continue to struggle as the leaders index fell 1.80% on the day on higher but still below average volume. Much of the decline was caused by a 23.83% fall in STS on very high volume. This distorted the index but it still would have been lower. A decline of this magnitude can distort an index of only 21 stocks so over the weekend I am going to replace a few stocks in the index that have broken badly and can’t be considered leaders. The market is struggling here and stocks that have been leaders since the beginning of the rally are breaking down. This is usually a sign that the rally is in real trouble. You never know in this environment when outside forces will step in and prevent a real decline, but both the major averages and leading stocks are acting poorly and the rally is in danger. Jerry