Leaders Index 1-4-22

The market had a mixed session today, but it was overall negative action. There was a real rotation out of growth stocks into value stocks today and the Nasd averages took a hit. The COMPQ and the NDX fell 1.33% and 1.35% respectively. The SPX was about flat with a decline of only .06%. All the major averages finished low in their intraday trading ranges, despite some late buying. Volume was higher across the board. It climbed 17.25% on the Nasd and 36.04% on the New York. This combined with the price decline was enough to produce a distribution day on the Nasd averages. The decline in the SPX was to little to qualify as distribution. Leading stocks were hit pretty hard as there was a clear rotation out of growth stocks into value stocks. ETFs of leading growth stocks showed real declines. The leaders index bucked the trend with a gain of .51% on the day. It closed high in its trading range and held its short term support at its 9dma. Volume was higher and above average. The market had a bit of a split session today. Growth stocks, particularly tech stocks, were hit as there was a rotation out of growth stocks into value stocks. A look at the chart of the SPYV clearly shows this. The COMPQ traded below its important 50dma today and only closed above it after some late buying came in. The market has essentially gone nowhere since the follow through of 12/15/21. If this shift to value continues then it will become more difficult to make progress in CANSLIM type stocks. The market seems to have a bid under it and is having trouble moving higher. It’s a sloppy market and a defensive posture is a good idea. Jerry