Leaders Index 8-5-19

The market really got pasted today. Overnight China announced that it would retaliate in an intensifying trade war. The major averages opened with significant losses and it was mostly downhill from there. A little late buying saw the major averages finish off their absolute lows but the declines were substantial. The largest losses were in the Nasd averages with the COMPQ and the NDX losing 3.49% and 3.60% respectively. The SPX fell 2.98%. All the major averages finished near the bottom of their intraday trading ranges, a sign of weakness. Volume was higher across the board. It was up by 14.07% on the Nasd and 13.11% on the New York. This shows that large institutional players were selling stocks heavily today. Leading stocks were hit hard as well with the leaders index declining 4.58% on the day. The index broke below its 17dma and closed just above the important 50dma. It closed in the lower half of its trading range and volume was much higher and well above average. The market broke badly today on the trade news. All the major averages broke below their 50dma’s and the New York Composite closed just below its 200dma. The rally was in a lot of trouble before today and is now pretty much over. There was so much damage done to both the major averages and leading growth stocks that it would be difficult to argue anything else. The leaders index held its 50dma, but so many of the individual components are broken that it makes that cold comfort. The major averages all broke below critical support at their 50dma’s on heavy volume. This shows that large institutional players, who are the dominate players, were sellers. After the decline of the last week or so the market is probably short term oversold and may snap back a little, but the trend now is clearly lower. After hours trading points to lower prices. The QLD closed today at 89.17, down 7.25%. The bid at the time of this writing is 86.00. Jerry