Leaders Index 7-11

The market sold off hard today on word that Italy may be the next of the PIIGS to get into trouble. The major averages were down in the 2% range on higher but still below average volume. This produced a distribution day across the board. IBD went back to market under pressure. The leaders got hit harder than the market, dropping 2.47% on higher but still below average volume. It tagged the 9dma and held above it. The major averages( other than the NDX) now seem to have been turned back below the late May highs. If this holds the head and shoulders patterns will be intact. The 50dma's on the major averages are now the critical levels. If they are breached it will be very negative for the market. Jerry