Leaders Index 7-23-20

The market put in a very negative session today. The major averages traded near unchanged for a short while then the selling came in and lasted pretty much the rest of the session. All the major averages closed near the bottom of their intraday trading ranges. Showing little buying interest as prices fell. The Nasd averages took the worst of it due to weakness in the big cap tech stocks. The COMPQ and the NDX were off by 2.29% and 2.67% respectively. The SPX declined 1.23%. Volume was higher across the board. It gained 8.39% on the Nasd and 1.00% on the New York. This shows that large institutional players were selling stocks today and, combined with the price declines, was enough to produce a new distribution day on all the major averages. Leading stocks were lower as well with the leaders index declining 1.96%. The index closed near the bottom of its trading range on higher and above average volume. This showed distribution in quality growth stocks. The index did hold above its short term 9dma, and that is positive. The market action today was concerning. The big price declines on heavier volume showed that large institutional players were dumping stocks today. The distribution count is getting heavier but is still below levels that usually signal real trouble. A real concern I have is that the weekly Coppock looks like it will give a sell signal. If there is a strong rally tomorrow that could be avoided and the sell signals on this indicator are not as good as the buy signals. It would however be a big red flag and would make me more cautious. The market recovered nicely from the ugly reversal it had on 7/13 and we will have to see if it can do it again. If it can’t rally back pretty quickly the picture will darken. Jerry