Leaders Index 7-22-05

The general market had a down session today. The major averages opened lower and although they finished off their lows the day’s action wasn’t pretty. The COMPQ fell .70% while the SPX was lower by .24%. The decline in AAPL was the catalyst and the same big cap tech stocks that were leading the market higher are now providing resistance. This can be seen in the 1.09% decline in the NDX. The hardest hit today were the semiconductor stocks with the SOX falling 2.52% and breaking to new lows. Volume was higher across the board so there was distribution on all the major averages. Leading stocks were mixed on the session as the leaders index was up .11% on the day. The index has flattened out in the last three or four trading days while the major averages have sold off. This produces a relative strength line for the index that is making new highs. The chart of the leaders index is still looking pretty good as it tagged it’s 9dma today but closed above it. The charts of the major averages are not looking as good. I think this is a high risk and low reward environment and your level of exposure should reflect that. Jerry