Leaders Index 3-22-19

The market really got pasted today. After opening lower the major averages spent the rest of the session selling off. The Nasd averages led the way down with the COMPQ and the NDX declining 2.50% and 2.23% respectively. The SPX fell 1.90%. All the major averages finished at or very near the lows of their intraday trading ranges as there was consistent selling throughout the session. Volume was higher across the board, showing that large institutional players were selling stocks today. This was enough to produce fresh distribution days on all the major averages. Leading stocks were hit hard as well with the leaders index falling 4.04% and closing near the bottom of its trading range. The index broke below its important 17dma support, now resistance, level. Volume was higher but still below average. This means that there was distribution in the leaders index as well. The selling continued throughout the session. There were several reasons offered for today’s action, including poor economic news from Europe and a further inverting of the yield curve. Whatever the reason real damage was done today. The leaders index lost its important 17dma, but the major averages remain above their 200dma support levels. There was only one stock today in the IBD 50 that was higher and many stocks had multiple percentage point losses. There was probably not enough damage done today to end the rally, but the distribution count is now pretty high and there are red flags out there. The real thing to watch now is if there is further weakness ahead do the major averages break below their respective 200dma’s. If they do the outlook will turn negative. Jerry