Leaders Index 6-25-18

It was an ugly session to say the least. After opening lower on increased trade tensions the major averages sold off hard for most of the session. Some milder remarks from the White House before the close saw the major average finish off their lows, but still with significant losses. The Nasd averages were the weakest today as tech stocks were hit the hardest. The COMPQ and the NDX were lower by 2.09% and 2.21% respectively. The SPX was lower by 1.37%. All the major averages closed low in their intraday trading ranges. Volume was lower across the board so there was no fresh distribution, but that is compared to artificially higher volume Friday due to the Russell rebalancing. Leading stocks were hit particularly hard today with the leaders index falling 3.11% and closing in the lower half of its trading range. It also broke below its important 17dma support level. Volume was lower than Friday and well below average. The market survived trade war talk recently by rallying back and closing at the top of its trading range. Today it didn’t do that. Leading stocks were hit hard almost across the board. This is the first time this has happened in a while. I have said that the best thing the market had going for it is the fact that quality growth stocks were outperforming the overall market. That is no longer happening as can be seen in the relative strength line of the leaders index. It topped out five trading days ago and I have been talking about some weaker action since the A’s minus E’s rolled over also five trading days ago. The damage done today was substantial. We must see a snap back quickly and with real conviction as the rally is in trouble now. Jerry