Leaders Index 3-13-14

It was an ugly day. After opening a little higher the major averages reversed and sold off hard for the rest of the session. They all finished at their lows of the day with the COMPQ leading the way, falling 1.46%. The SPY was close behind with a fall of 1.17%. Volume was much higher across the board and above average on the Nasd. This produced distribution days on all the major averages. Leading stocks were hit even worse than the overall market with the leaders index falling 2.40% on heavier but slightly below average volume. There was distribution on this index also. The index fell back below it’s important 17dma after regaining it yesterday. When an index breaks an important moving average and gets back above it only to break below it again it is a very negative sign. All of the major averages and the leaders index are below their short term moving averages and acting poorly. It has been dangerous to try to call market declines in the last year as all the sell offs were quickly reversed and the markets headed higher again. In a QE world there is something of a government floor under the market. At some point this floor will break and we will see a serious decline, but no one knows when that will come. This is a very difficult market to make worthwhile money in. I have found that it is best to trade when it is easy to make money and back away when it isn’t. This is a time to be very careful. Jerry