Leaders Index 5-5-21

There was no update yesterday because I got back in to late to do one last night. The market has certainly taken a turn for the worse in the last couple of days. Yesterday there was a selloff, mostly in the Nasd averages, and a lot of overall weakness. There was also much higher volume, showing that large institutional players were selling stocks. Today the major averages opened nicely higher, but it didn’t last. Selling came in and all the major averages finished low in their intraday trading ranges in a negative reversal. The Nasd averages again took the worst of it with the COMPQ and the NDX lower by .37% and .30% respectively. The SPX was slightly higher by .07%. Volume was lower across the board, after yesterday’s very high levels. It fell 22.82% on Nasd and 9.67% on the New York. Leading stocks were mostly lower as well with the leaders index off by .40% on the session. The index closed low in its trading range but held above its 17dma support level. Volume was higher and showed heavy selling in leading stocks. The action of the market in the last couple of days has darkened the picture quite a bit. Yesterday there was heavy selling on sizable declines in the major averages. The Nasd stocks and tech stocks were particularly hard hit. After a big decline you look to the quality of the bounce to try to determine if the worst is over. Today the major averages opened strong and produced some solid early gains. It didn’t last and a negative reversal saw the major averages sell off into the close. The Nasd averages are the weakest and closed with decent losses. The Small caps and the semiconductors have been particularly hard hit as the SOX and the RUT are both below their 50dma’s. There has been some strength in energy and building related stocks and that is holding up the New York averages better. The fact that the small and mid-cap stocks that have mostly led this rally are breaking down is a cause for concern. I would be holding a fair amount of cash right now. Jerry