Leaders Index 8-21

The market opened lower today and was down early while awaiting the Fed minutes. There was a rally after the announcement, but it couldn’t hold, and the market sold off into the close. The major averages finished the session on their lows, a sign of weakness. Volume was mixed, higher on the Nasd and lower on the New York averages. The COMPQ held up best today, falling .38% while the NYA dropped .87%. The New York averages are falling further below their 50dma’s while the Nasd averages are still holding theirs. Leading stocks had a better session than the overall market as the leaders index fell only .02%. Volume was higher, but slightly below average, so there was distribution in the leading stocks as well as the COMPQ. While there are some quality stocks holding up well, the overall action is weak. It is always possible that if the decline really gathers steam the Fed could step back in a prop it up with more printed money, but barring that it looks like we are heading lower. The 8% correction level is critical to watch. Three quarters of all corrections are contained at this level, and if it goes further at least an intermediate term correction is usually in the cards. Jerry