Leaders Index 10-10-18

The market was crushed today. After opening lower the major averages continued down for the rest of the session. Late selling saw all the major averages close at their intraday trading lows. The Nasd averages were hit the hardest with the COMPQ and the NDX falling by 4.08% and 4.44% respectively. The SPX declined 3.29%. Volume increased strongly across the board, especially on the New York. This shows that large institutional players were selling today and produced fresh distribution on all the major averages. Leading stocks were hit hard as well with the leaders index declining 3.87% and closing low in its trading range. Volume increased dramatically and was the highest since the last expiration day. This is also the biggest red candle on the chart and the short term moving averages are moving further below the 50dma. The selling seemed to feed on itself as the day progressed. These are the largest single day losses for the New York averages in months and the largest loss for the Nasd averages since Brexit. Important support has been broken as the COMPQ as well as the NYA are below their 200dma’s. Other important market averages are close to this long term moving average. The leaders index is badly broken as quality growth stocks continued their weak action. There was not a single stock in the IBD 50 today that was higher. The market has been giving off warning signs for about a week and a half now. I have discussed them in recent updates. Those following the canslim discipline should have had a high percentage of cash in their portfolios so today’s damage should be minor. There may be a bounce after a decline like we saw today, but the market has a long way to go before it could look attractive again. Jerry