Leaders Index 1-27-20

About the only good thing you can say about today’s action is that it could have been worse. The market gapped lower at the open on news of the spreading of the coronavirus. The losses at the open were significant. The Nasd averages were the weakest with the COMPQ and the NDX falling 1.89% and 2.07% respectively. The SPX lost 1.57%. The Nasd averages finished in about the middle of their trading ranges and the New York averages closed near the bottom of their trading ranges. Volume on the Nasd was lower by 6.12% and on the New York it was off by .44% on the New York, according to Esignal. The New York volume was so close that other data feeds could come back with different results. Leading stocks were hit hard as well with the leaders index declining 2.75%. The index broke important support at the 9dma and more importantly the 17dma. Volume was high but lower than Friday. The index also closed in the upper half of its trading range. Markets around the world were spooked by the seeming spread of the coronavirus and there were declines around the world. Local markets took real hits and there was significant damage done today. Many leading stocks sold off hard and the leaders index broke important support at its 17dma. All the declines today in the major averages occurred at the open. The lows of the day were made in the first five minutes of trading and the market traded sideways from there. It looks like it was stable the rest of the day, which is good. The fact that there was not higher volume today suggests that the selling pressure was a bit contained. I said last week that the two shorter term indicators I watch turned down and that there might be some weakness ahead. That turned out to be the case. Another item to watch is the weekly Coppock. It turned up in the middle of Oct. to signal the strong advance we had since then. The week is not over but if the COMPQ closes the week where it is now the Coppock will turn down. This would be very negative. Right now we will have to see if the market can quickly recover these losses. If it can the worst of this sell off may be over. If not we will see lower prices. Jerry