Leaders Index 10-18-18

There was no update yesterday due to computer problems, sorry. The negative action continued today. After a big decline the market tried to stage a rally with the solid advance on Tuesday, but it didn’t last. Yesterday’s action showed a lack of follow through and today the market fell hard. The major averages opened lower and worked their way down for the rest of the session. All the major averages finished at or pretty close to their intraday trading lows, showing that there was little buying interest as prices fell. The Nasd averages were the weakest with the COMPQ and the NDX declining 2.06% and 2.23% respectively. The SPX fell 1.44%. Volume was higher across the board, showing that large institutional players were selling stocks, producing more distribution. Leading stocks sold off as well with the leaders index falling 1.96% on the day and closing low in its trading range. Volume was higher and a little above average, showing that there was selling in quality growth stocks as well. The index continues to move further below its moving averages after a seemingly aborted rally attempt. The picture for the overall market continued to darken. The major averages, after breaking below their 200dma’s rallied above them, but couldn’t hold. The SPX is sitting right on its 200dma while the other major averages are back below this important moving average. When an average or individual stock breaks an important moving average, rallies back above it but can’t hold then lower prices are usually on the way. Earning season so far doesn’t seem to be helping stocks much, and about the only thing I can see that might give the market a real jolt would be the announcement of a major trade deal. The rally on Tuesday looked good, but history has shown that the vast majority of the biggest up days on the major averages occurred during bear markets. We may be in a bear market right now but it is too early to really tell. Right now taking new position would be foolish. The weather in So Cal is great right now and the beach is really nice. Jerry