Leaders Index 12-20-23

The market suffered a nasty reversal today. After moderate gains early on a Fed governor threw cold water on rate cuts and selling came in strong and lasted the rest of the day. All the major averages finished near their intraday trading lows. The COMPQ and the NDX fell 1.50% and 1.53% respectively. The SPX declined 1.47%. Volume was higher across the board, producing a distribution day on all the major averages. Leading stocks declined as well with the leaders index lower by 1.86% on the day. The index closed low in its trading range on higher but below average volume. The market was up moderately until a Fed governor said that rate cuts next year might be less than the market expects. The market has come a long way in a short period and was vulnerable to a pullback. We got one on the press conference and some of the recent euphoria went away. This kind of a reversal can lead to some short term weakness, but I don’t think that it will be too much. Today’s action does not change the overall picture and the rally likely has further to go. Jerry