Leaders Index 3-7-14

The market had another troubling reversal on Friday. After a slightly higher open the major averages sold off and and closed in the lower half of their intraday trading ranges. The SPY closed up slightly with a gain of .10% while the COMPQ was off by .40%. Volume was higher across the board so there was distribution on the Nasd averages. Leading stocks had a bad session as well as the leaders index fell 1.52% on lower and below average volume. I said earlier in the week the the action was getting a little sloppy and that continued on Friday. The big red candle on the chart is a real warning sign. Both the leaders index and the major averages are still holding important moving averages, but more and more leaders are showing signs of stress. The distribution count on the COMPQ jumped to worrisome levels as yesterday’s distribution day allowed a previous stalling day to come into play. There are warning signs building right now that should put us on alert. If the market rallies nicely next week some of this concern will ease. If not it may be a good idea to identify some positions that would allow you to raise cash. Jerry