Leaders Index 12-21-18

There is really nothing good to say about today’s action. The major averages built some solid early gains on a dovish interview with the New York Fed president, but it didn’t last. Less than an hour into trading the selling came in and it was pretty relentless for the rest of the day. All the major averages finished at or very near their intraday trading lows, again. The losses were substantial with the COMPQ and the NDX declining 2.99% and 3.15% respectively. The SPX fell 2.06%. Volume was much higher across the board. This was mainly due to today being an expiration session, but is was heavy volume on big price declines. Leading stocks got hit as well with the leaders index falling 2.68% and closing near the bottom of its trading range. It moved further below its 50dma and is closing in on its 200dma. Volume was very high, again due to expiration. We are seeing an unusually strong decline right now, the kind that don’t come along very often. The losses in December have been very large, not what you usually see in the seasonally positive month of December. There doesn’t seem to be any question now that we are indeed in a bear market. The question now is how deep it will go. We can’t know that but will have to wait and see how it will unfold. There doesn’t seem to be much support under the market right now, but it is pretty extended to the downside and some sort of snap back rally is to be expected. That could come on a deal to keep the government open or a trade deal. But good news doesn’t seem to last long in this environment. In bear markets good news is bad news. I have included a graph I found on past Nasdaq bear market that I think is helpful. Monday is a half day and likely slow so there will be no update as I am taking a four day weekend. I hope everyone has a good Christmas weekend. Jerry