Leaders Index 3-27-18

In another negative reversal the market gave back most of what it gained yesterday. The major averages showed a little early strength, but it didn’t last long. After topping out it was straight down from there. All the major averages closed near their intraday trading lows, showing that there was no buying support as prices fell. The COMPQ took the biggest hit as it declined 2.93% while the SPX fell 1.73%. Volume was higher on the New York and very close on the Nasd. Esignal had Nasd volume higher by 1.8%. This shows fresh distribution today. Leading stocks were hurt as well with the leaders index falling 4.26% on the day. The index closed near the bottom of its trading range, a negative sign. There was also an attempt to regain the 17dma resistance level that failed miserably. Volume was significantly higher and well above average. The index also took out the lows of last Friday and the next stop appears to be the 50dma. The market gave back virtually all of yesterday’s gains today in what was not only a negative reversal but an outside day on all the major averages. The charts of the major averages have looked pretty bad for a while now as the chart of the leaders index had held up well. That changed last week with the leaders index starting to confirm the weakness in the overall market. The rally attempt after the follow through on 2/14 is clearly over and the big question now is how much the market will fall. The SPX is very close to its 200dma while the Nasd averages have a little more to go. The 50dma lines of the major averages are now pointing down. The question now is if the major averages will break below their respective 200 day moving averages. The evidence that this is more than a correction is building and that would grow if this still support level is broken. Jerry