Leaders Index 5-4

The market got hit hard yesterday with all the major averages dropping below their 50dma's. The SPX joined all the other major averages below this important support level. Most averages gapped down on the disappointing employment report. The MEM missed going to zero as the COMPQ fell 2.25%, just below the 2.5% needed for a bad break(S10)signal. It closed just above the most recent marked low at 2946.04 and will likely hit that level soon. This will produce a lower low(S12) signal. This will bring the model to zero and a full distribution count will turn the buy switch off. IBD also went to market in correction. Leading stocks got hit hard as the leaders index fell 2.49% on higher and above average volume. It closed just above it's 17dma. Stocks that have led the rally not only since December but going back to 2009 are breaking down. CMG broke below it's 50dma. The question now is how far this decline will go. Watch the down 8% level on the major averages. If this is breached we will likely have a full fledged intermediate correction. Jerry