The market took a dive today. All the major averages opened lower and mostly worked their way down the reminder of the session. The declines were pretty evenly divided with the COMPQ and the NDX falling 1.19% and 1.11% respectively. The SPX declined 1.22%. There was a little late buying that brought the major averages off their absolute lows, but they all closed low in their trading ranges. This shows little buying interest as prices fell. Volume was lower across the board. It was off by 7.82% on the Nasd and 10.72% on the New York. The lower volume was about the only positive today. Leading stocks were hit hard as well with the leaders index declining 2.58% on the day. It closed in the lower half of its trading range and volume was a bit higher but still below average. The selloff in the major averages wiped out most of the gains we saw in the up days last week. It looks like the major averages rallied up to and slightly overcame their 50dma’s and were not able to hold above this important moving average. It looks like this is becoming more significant resistance for the major averages. About the only encouraging development today was the lower volume. It shows that large institutional players were not heavy sellers today. We continue to be in a position where there can be a follow through any session. The major averages remain above the lows set on 8/5 and so a rally attempt is technically in force. Right now it doesn’t look very strong and a defensive position is warranted. Jerry
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