Leaders Index 2-25-21

The market opened today just like it did over the last couple of sessions. The difference was there was no buying coming in to rescue it. The major averages opened lower and then sold off for the rest of the day. The selling continued into the close and all the major averages finished close to their intraday trading lows. The Nasd averages took the brunt of it as there was continued weakness in big tech stocks. The COMPQ and the NDX fell 3.52% and 3.56% respectively. The SPX fell 2.45%. Volume was higher across the board. It gained 12.61% on the New York and 11.88% on the Nasd. Leading stocks were hit hard as well with the leaders index falling 6.84% on the day. The index closed near the bottom of its trading range on higher and above average volume. The leaders index, along with its relative strength line, broke the important 50dma today and closed below this moving average for the first time since the rally started. The action today was very negative. The selling started early and continued throughout the day. The high volume along with the price decline produced distribution on all the major averages and the leaders index. This shows that large institutional players were selling stocks today. The Nasd averages and the leaders index closed below their 50dma’s for the first time in the rally. This is very negative. The recent underperformance of leading stocks was a warning. The government could come out with announcements about stimulus or QE and spark a short upturn, but it looks like the rally has likely seen its highs. Jerry