The market put in another fairly quiet consolidation session today. After opening briefly higher the major averages quickly sold off and they then went mostly sideways for the rest of the session, finishing little changed. The COMPQ closed with a loss of .04% while the SPX fell only .08%. All the major averages closed in the lower half of their intraday trading range, a sign that there was little buying pressure from large institutional players. Volume was lower across the board and below average on both exchanges. This is good as you want to see lower volume as the market consolidates after a move into new high ground. There was some strength in the small and mid-cap stocks with the RUT and MID gaining .22% and .15% respectively. The greatest strength was in the semiconductors as the SOX rallied .70%. Leading stocks continued to consolidate with the leaders index declining .36% and closing in about the middle of its trading range. The index held above its important 17dma now support level and is now just above a confluence of three moving averages. This provides strong support and a break below this support would be negative. Volume was lower and well below average, a good sign. The market continues to digest its run to new highs in a pretty constructive manner. We have had two days of mild declines on light volume. This is the type of action you want to see after an advance. There is not a lot of selling as the market moves sideways. The positive case right now would be a resumption of the advance in higher volume. The negative case would be a break of the major averages back into the basing patterns they were in a week ago and the leaders index breaking support at its moving averages. We will have to wait and see which way it goes. Jerry
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