Leading Stocks Falter

Last week I said the market looked like it was at a critical decision point because, among other reasons, exactly half of all US stocks were below their 200-day moving average (June 22, Market update - decision point?). Today leading stocks are faltering and it looks like the bears are in charge.

Six weeks ago I pointed out MED (Medifast) had made a double top when it failed to make a new all-time high (May 19: MED puts in a double top: Bad news for stocks). I read that as a major warning sign for stocks in general because MED had been an all-star and was the best performing stock of the last decade (per Bespoke). Don't get me wrong, MED has been a resilient stock, but this time, as it slices through the 200-day moving average, the chart looks too ominous and has "pump and dump" written all over it.




In other news, AAPL has completed the right side of the Island Top I pointed out last week (June 24, Island Top for AAPL?). More bearish confirmation.



A few of the all-time highs are holding up well so far, including HTWR (Heatware International). I wouldn't initiate a long-position here, but I'm watching them to see how they hold up. One advantage of a stock like this is that it isn't in any index so it should be more independent of people selling SPY, QQQQ, or IWM index ETFs.