Leaders Index 10-23-17

The market sold off today. After opening a little higher the major averages sold off for the rest of the session and all closed at their intraday trading lows, a negative sign. The COMPQ led the way lower with a loss of .64% while the SPX declined .40%. Volume was mixed. It was lower on the New York, which you would expect after an expiration day on Friday. Volume on the Nasd was slightly higher than Friday. This is enough to produce another distribution day on the Nasd averages, the third in the last four sessions. This is now very close to a distribution cluster, which would be very negative. Leading stocks were weak on the day as well with the leaders index falling .77% on the session. The index closed low in its trading range and volume was lower and below average. The index closed below its short term 9dma, but held above its important 17dma. It is clearly consolidating right now after its recent advance. I have been saying for a few days now that the market seems to be consolidating after the major averages rallied to new highs. The leaders index is doing the same thing as quality growth stocks have clearly lost momentum in recent days. For the last year, or several years, for that matter all declines have been shallow and have been followed by rallies to new highs. So far the damage is limited and there is no real evidence that anything worse will happen now. But one of these day a minor pullback like we have seen many times in the recent past will not stop in minor territory and will turn into something more substantial. There is no way of knowing in advance when that will happen and so far it hasn’t gone to those levels. Jerry