Leaders Index 2-7-19

The market put in its first negative session in a while today. The major averages opened lower after weakness in Europe caused selling early and then continued down when an administration official said a deal with China may not be as close as thought. The Nasd averages led the way lower with the COMPQ and NDX lower by 1.18% and 1.32% respectively. The SPX declined .94%. Late buying saw the major averages finish off the lows and in the upper half of their intraday trading ranges. Volume was higher across the board, showing the first real institutional selling in a couple of weeks. Leading stocks were lower as well with the leaders index falling 1.60% on the day. The index closed high in its trading range, but below its short term 9dma for the first time since the rally began. Volume was lower and below average, so there was not heavy selling in quality growth stocks. The action today showed the first real negatives we have seen in a while. The only positive item is that the major averages and the leaders index closed in the upper half of their trading ranges. There were several negatives. There was a decline in high volume, producing distribution days on all the major averages. This is the first real sign of large institutional players selling stocks since the rally began. The A’s minus E’s went flat yesterday and turned down today. This indicator went positive on 12/28/18 and remained so until today. The most important of all is the 200dma’s on the major averages. The charts have a look of the major averages being turned back at this important resistance. One bad day doesn’t change the trend and the distribution count is still low, but a few cracks in the armor of the rally appeared today. The major averages must break above their respective 200dma’s for the rally to continue. Jerry