Leaders Index 5-4-15

The market opened strong today with all the major averages showing real gains. The major averages topped out for the session in the first forty minutes and spent the rest of the session selling off. The SPX finished the day with a gain of .29% while the COMPQ climbed .23%. Both of these closes were at or near the bottom of their intraday trading ranges. Volume was lower across the board, showing that large institutional players were not heavy buyers today. The selloff last week was on high volume while the rebound of the last two sessions was on lower volume. Leading stocks pretty much mirrored the overall market. The leaders index was higher by .64% on lower and below average volume. The index tagged it’s important 17dma today but couldn’t break above it. The close was just below the mid point of it’s intraday range. The pattern on the leaders index and the major averages is pretty much the same. We saw four days of big declines in a row on heavy volume and the last two rebound days were both on successively lower volume. This shows a lot more selling pressure than buying pressure, not a positive sign. Both the leaders index and the major averages are starting to take on a wedging look. This must change quickly. Overall the market is not acting well. We are still stuck in a trading range on the major averages and quality growth stocks are generally not producing worthwhile gains. The picture is getting more and more bearish and a good degree of caution is warranted. Jerry