Leaders Index 12-4-18

The market got really pasted today. The major averages started off lower and worked their way down the entire session. The losses were not too bad until some interviews and tweets came out saying that a trade deal with China was far from done. The selling accelerated into the close and all the major averages finished at their intraday trading lows. The losses were substantial with the Nasd averages leading the way. The COMPQ and the NDX declined by 3.80% and 3.78% respectively. The SPX fell 3.24%. Volume was higher and above average on the New York. It was very close on the Nasd so different data feeds could have different results, but it was well above average. Either way it showed that large institutional players were selling stocks and that there was distribution on at least the New York averages. Leading stocks were hit hard as well with the leaders index falling 4.14% on the session. The index closed near the bottom of its trading range and just above the important 17dma. This moving average is critical support. Volume was lower but still slightly above average. The market took a real hit today that brings the rally attempt into question. The New York averages regained their important 50dma’s and 200dma’s yesterday and lost them today. This is negative. The Nasd averages rallied into these resistance levels but were turned back. They moved further down today. Today’s action was pretty extreme and takes the bloom off the follow through of last Wednesday. The leaders index must hold its 17dma and the major averages have to get above the resistance levels provided by the moving averages. Today’s action makes that a lot less likely. The chance of a weekly Coppock buy signal is also much less likely. Real damage was done today and a much more defensive posture is warranted. Jerry