Leaders Index 5-11

The market bounced around unchanged yesterday in a fairly dull session. The major averages finished slightly down on the day except for the COMPQ which was flat, all closed near the lows of the day. Volume was mixed, lower on the Nasd and slightly higher on the NYSE. This produced distribution days on the New York averages. Leading stocks followed the lead of the overall market and were down a bit on the day. The leaders index fell .11% on low volume. The index is now sitting on it's 50dma. How it reacts at this level is critical. If it breaks below this important support, especially on volume, it will be a big negative for the market. Overall we remain in a correction and should watch the 8% down level on the major averages. If this is broken along with important support at the 2900 level we will likely see lower prices. Jerry