Global Slowdown - Leading Stock Review

Stocks remain in a correction and the NASDAQ looks likely to test April support around 2,725.  Weakness in Leading Global Growth indicators, among other data released during the week, underscore the challenges stocks face advancing form current levels.

Last week leading stocks continued to experience selling.  Monday the NASDAQ fell 1.6% and broke support at 2800.  The NYSE only suffered a 0.4% pullback but volume on both exchanges was above average.  As a sign of additional defensive posturing by investors, stocks from health care, utility and tobacco industry groups showed the most strength as the week kicked off.  45 stocks of the IBD 50 lost ground on the 16th.

Tuesday stocks bounced back from declines earlier in the trading session to end slightly mixed.  Volume climbed on the positive reversal and leading stocks saw constructive action.

Wednesday action followed with nice gains but lighter volume muted them.  IBD Top-rated stocks moved up in strong trade but were unable to break out of recent trading ranges.  Ideally leading stocks would be moving into new high territory.

Stocks spent Thursday in a quiet session that produced small gains.  The IBD 50's 0.5% gain outpaced the S&P 500, NYSE, & NASDAQ.

Stocks tried to rally on Friday but selling in the final two hours dashed hopes for a positive close.  Volume was higher but options expiration explains part of the increase.  For the week the IBD 50 was down 1.2%, the NASDAQ 0.9%, the S&P 500 0.3% and the NYSE 0.2%.

The selling continued around the globe as markets opened on Monday, largely in response to the deteriorating debt conditions in some European Union members.  In the U.S. the NASDAQ suffered the biggest decline, down 1.6%.  Volume came in lighter on the major indexes but evidence continues to mount that we may be in the early stages of a significant correction.