Leaders Index 6-3

The correction continued to deepen on Friday with the major averages down in excess of 1%. Volume was mixed, about even on the Nasd and lower on the NYSE. All the major averages have now undercut their recent lows so the rally attempt is dead by all measures. The Leaders were hit harder than the overall market with the index declining 2.44% on higher volume. It has not undercut recent lows, but is below all the important moving averages. The 9 and 17dma's are also below the 50dma, which is a negative sign and they all are significant resistance for the index. There isn't much positive going on right now. QE2 ends this month. When QE1 ended we had a significant decline and this may happen again. Shorting is dangerous since we never know when the Fed will step in. We are in a death of a thousand cuts type market where any positions can quickly become losers, so it seems to me that the sidelines are the place to be. Jerry