Leaders Index 5-22-18

After opening higher today the market reversed and gave up the gains. The major averages saw their highs in the first ten minutes of trading and sold off pretty consistently from there. The COMPQ finished the session lower by .21% while the SPX declined .31%. All the major averages closed at their intraday trading lows, showing little buying interest as prices fell. Volume on the Nasd was very close but seems to have come in slightly lower. Volume on the New York was clearly higher, meaning there was a fresh distribution day on the New York averages. Leading stocks were a bit lower as the leaders index declined .64% and closed in the lower half of its intraday trading range. The index remains above its short term 9dma support level and volume was lower than yesterday. You want to see lower volume as the index pulls back. It looked early like there would be a continuation of positive price action today. A news story saying that Trump wasn’t happy with the China trade talks and that the meeting with north Korea might not happen took the steam out of the market. In a news driven market things can reverse if the news changes. That is what seems to have happened today. The damage done was pretty limited. The charts of both the major averages and particularly the leaders index still look like they are in good shape. The real concern is the elevated number of distribution days on the New York averages. Today’s action was disappointing, but the overall picture still looks like it points to higher prices at least in the short term. Jerry