It was another ugly session today. About the only good thing you can say is that the market closed off its lows. The major averages opened lower and it was pretty much down the entire day. All the major averages had significant losses and made new lows for the decline. The COMPQ and the NDX declined 1.63% and 1.57% respectively. The SPX declined 1.58%. All the major averages finished low in their intraday trading ranges. Volume was much higher and well above average on both exchanges. Leading stocks were hit hard as well with the leaders index off by 2.83%. The index closed in the lower half of its trading range on higher and well above average volume. It continues to live below its important 17dma resistance level. The market is looking really bad right now. The selling is continuing, and maybe accelerating. The last two days have seen large declines on high and increasing volume. This is the signature of large institutional players dumping stocks. The COMPQ breached the 20% down level today when using intraday highs and lows. On a closing basis it is still a little short. This means that the COMPQ now meets the traditional definition of a bear market. It joins the small cap averages in this camp. The other major and secondary averages are not far behind. The market appears to be a little stretched to the downside right now and some kind of snap back rally would not be surprising, but the market is showing unusual weakness. If there is a bounce before year end it will be important to see if there is any real power behind it before taking it to seriously. I don’t think we have seen the lows of this bear market. Jerry
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