The market took a break today after its recent advance. After some early weakness the major averages recovered some of the decline and finished with moderate losses. The Nasd averages were the weakest today with the COMPQ and the NDX lower by .36% and .37% respectively. The SPX lost .22% on the day. The SPX closed just above the midpoint of its trading range while the Nasd averages finished in the lower half of their intraday trading ranges. Volume was lower on the Nasd and very close on the New York, although its looks like it will be a little lower there too. This means that there was no new distribution today. Leading stocks were off today as well with the leaders index falling 1.03%. The index closed in the upper half of its trading range on lower and slightly below average volume. It traded below its short term 9dma but closed above this support level. The market acted in an overall positive fashion today. After rallying in recent days it pulled back a bit today in a constructive manner. Volume was a bit lighter, which is what you want to see when prices are consolidating or pulling back. This means that there was no fresh distribution and the total count remains small. There has been unusual strength in the semiconductor sector as the SOX broke above its 200dma yesterday and moved further above it today. The leaders index is acting well as it remains above its short term 9dma support level. Its volume signature remains encouraging as there are rally days on higher volume while the down days are on lighter volume. The major averages are sitting right below their 200dma resistance levels. Stocks and averages often take a little time trading below these levels before they try to break through. The ability of the major averages to break above their 200dma’s will determine if the rally has further to go. Jerry
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