Leaders Index 7-29

The market continued to sell off yesterday as all the major averages declined and closed near the lows of the day. Volume increased sharply across the board, which is unusual on a summer Friday. This produced significant distribution. Many of the major averages are approaching their 200dma's and the NYA is below it. Important support levels are not holding, which usually means lower prices ahead. The leaders declined about in line with the overall market with the leaders index dropping .65% on lower volume. It traded below the 50dma most of the day and closed right on it. When a broad based index of leading stocks is below a support level as important as the 50dma it is a serious negative. We continue to bounce around on news stories and a deal on the debt limit next week would likely cause a sharp rally, but I think is will be a one or two day bounce and we will then head lower again. Next week will be interesting. Jerry