Leaders Index 12-2-13

The market opened higher today but the major averages set their intraday highs in the first fifteen minutes of trading. They sold off for the rest of the session and closed near their lows of the day. The NYA lead the way down with a loss of .45% and the SPY closed lower by .27%. After making new highs last week and breaking important century and millennium marks today’s action looks like a reversal. Volume was higher across the board, as would be expected after a short session on Friday. This produced distribution on all the major averages. After underperforming the overall market last week leading stocks did better today as the leaders index rose .89% on higher but still well below average volume. After dancing with the important 17dma last week the index got a little space between itself and the moving average today. Since the index topped out in a reversal day on 11/18 the index has been unable to get into new high ground on both a price and a relative strength basis. This while the major averages have set new highs for the move. It is a negative sign when quality stocks underperform the major averages. There are very few stocks that look buyable right now and even fewer are producing meaningful gains, but there are some that look like they are forming bases. There are very few stocks I would want to buy now and that combined with a high distribution count must make one cautious on the market. We could well have a Santa Claus rally into the end of the year, but with slim pickings in individual stocks it may be safer to play the rally with ETF’s. Jerry