The market put in an overall disappointing performance today. The Nasd averages were weak while the New York averages struggled to close in positive ground. The COMPQ and the NDX were lower by .23% and .26% respectively. The SPX manages to finish about unchanged with a gain of only .04%. The positive part of today’s action is that all the major averages closed near the top of their intraday trading range. This shows that there were buyers coming in as prices fell. Volume was higher on the New York, but there was no distribution because the SPX closed slightly higher. On the Nasd the volume was close but Esignal has it slightly higher. This would be enough to produce fresh distribution on the Nasd averages. Leading stocks followed the same pattern as the Nasd averages. Weakness in quality growth stocks, particularly tech stocks, caused the index to decline .85% on the day. The index closed high in its trading range and held the important 17dma support level. Volume was higher than yesterday and the strongest in weeks. After last week’s selling I said we needed to see strong positive action this week to improve the picture. We are not seeing it so far. After modest rallies the last two days we saw selling in leading stocks today. The leaders index has moved into a consolidation for the last six trading days after a rally to new highs. So far the chart of the leaders index shows it holding support at the 17dma. The volume in this consolidation has been high, the opposite of what you want to see. The charts of the major averages still look ok, but there is little strength right now. We need to see the major averages and the leaders index break into new high ground with some real conviction to show the current rally can continue. Jerry
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