Leaders Index 5-22

The market had an ugly reversal today. It had a strong gain early after Bernanke sounded dovish, but then minutes from the last Fed meeting showed more support for reducing QE and the sell off began. After one percent gains early the major averages reversed and closed down between .83% on the SPY and 1.11% on the COMPQ. Volume expanded dramatically and was well above average. The averages also closed near the lows of the session, so there was no support near the close. This produced distribution days all around. Leading stocks got hit as well as the leaders index declined 1.91% on higher and well above average volume. The index broke below it’s 9dma and tagged the 17dma before closing above it. The index must stay above this important moving average. The major averages all hit their 10dma’s but closed above them. There was serious damage done today, and the reversal stands out like a sore thumb on the charts. The market needs to rally quickly. Any further weakness here and the rally will be in real trouble. Jerry