Leaders Index 11-6-13

The market opened strong today on all the major averages, but the Nasd averages lost their rally and closed near the lows of the session. The New York averages seem to have taken over the leadership. The INDU lead the way with a gain of .82% for a new high while the SPY rose .43%. Both closed near their intraday highs. Volume was mixed, lower on the New York and higher on the Nasd. This produced another distribution day on the COMPQ, bringing the total to five in the Big Picture and seven on the MEM. Leading stocks got hit hard with the leaders index falling 3.69% on slightly lower but still above average volume. The 14.5% decline in TSLA was almost off set by a 10.4% gain in FNGN. It looked like the leaders might be stabilizing, but today’s action seems to have ended that. The index is again dancing with it’s 50dma and is back below it’s 17dma. It’s RS line has also broken below the 50dma. The leaders index has been struggling for a while and now the Nasd and small cap averages look like they are joining them. The action is shifting to the New York averages, that have a more large cap and defensive nature to them. Distribution days are building up and sentiment seems to be getting very bullish. The Investors Intelligence bullish numbers are over 55%, a level that has seen corrections in the past. Stocks that have lead the rally all year are breaking down and cracks in the major averages are appearing. It is time for a considerable amount of caution. Jerry