Leaders Index 7-2

The market started off higher today but made it’s intraday within the first two hours. It then reversed and spent the rest of the session selling off. We had a decent loss going until a late rally brought the major averages off their lows. All the major averages closed with small losses, completing a reversal day. Declines on the major averages ranged from .03% on the COMPQ to .26% on the NYA. Volume was higher across the board so there was distribution on the NYA, but not the others. Leading stocks were generally weaker than the overall market as the leaders index fell .82% on higher but slightly below average volume. The index tagged it’s 50dma again but was turned back. The inability of the index to break above this important moving average is a real sign of weakness. Also, every day of above average volume in the last two weeks has been on a down day. The COMPQ held above it’s 50dma, but all the New York averages remain below this moving average and are beginning to live below it. The rally attempt after the recent sell off continues to disappoint. There are a few stocks that have broken out but few are producing worth while gains. With the market still in correction caution is advisable. Jerry