Leaders Index 7-7-20

The market pulled back today after yesterday’s rally. The major averages opened lower and then rallied to positive territory, especially the Nasd averages. They topped out as selling came in and continued lower into the close. All the major averages finished at their intraday trading lows. The COMPQ and the NDX fell .86% and .75% respectively while the SPX lost 1.08%. Volume was lower across the board. It declined 4.76% on the Nasd and 2.08% on the New York. This shows that large institutional players were not heavy sellers of stocks today. Leading stocks were lower as well with the leaders index falling .89% on the day. The index closed low in its trading range on lower and below average volume. The index remains above all its short term moving averages and its relative strength line made a new high. It looked early on like it would be another positive session. A lower open gave way to gains, especially on the Nasd averages. Selling came in as some market participants decided to take some gains, but it wasn’t heavy. The declines were less than yesterday’s advances and volume was lower than yesterday. This shows that large institutional players were not dumping stocks heavily. This is encouraging. The reversal was disappointing, but the market can’t go straight up. The damage done today was pretty minor as the charts of the major averages and the leaders index still look ok. The market is a little ahead of itself on a short term basis, especially the Nasd averages, but there are few important warning signs right now. Jerry