The market got hit pretty hard today in the first real session of heavy institutional selling since the most recent follow through. The major averages opened lower and spent the rest of the day going down. A speech by Powell saying that rates cuts might be less than the market has priced in got the selling really going and then attempts to lower expectations about the G20 meeting this weekend added to the pressure. All the major averages finished at the bottom of their intraday trading ranges, showing no support as prices fell. The Nasd averages were the weakest with the COMPQ and the NDX losing 1.51% and 1.70% respectively. The SPX declined .95%. Volume was higher across the board, according to Esignal. It was 2.49% higher on the Nasd and 16.38% higher on the New York. Leading stocks were hit hard as well with the leaders index declining 1.94% and closing low in its trading range. The index closed below its important 17dma in an important break of support. Volume was lower than yesterday but still very high. This is three days in a row that quality growth stocks have sold off hard on high volume. Not an encouraging development. The market is acting pretty poorly in the last few days and the rally attempt appear to be under some stress. Leading stocks are breaking support and the modest gains since the follow through are rapidly disappearing. Although the distribution count is still modest it does look like leading stocks are being sold off. The Nasd averages are fast coming down to their 50dma’s. If they break this important moving average it will be very negative and the rally will be in serious trouble. As we saw today news events can move the market one way or the other, but the market seems to have priced in a pretty rosy scenario. Leading stocks have been weak for a few days now and it looks like the overall market may be starting to follow them. Much more weakness from here and the outlook will change. Jerry
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