The market sold off pretty hard yesterday. The major averages opened a bit higher, but the selling came in quickly and lasted for most of the session. The Nasd averages took the worst of it with the COMPQ and the NDX falling .80% and .99% respectively. The SPX was off by .49%. All the major averages closed at or near the bottom of their intraday trading ranges, a negative sign. Volume increased a lot across the board. It was higher by 25.29% on the Nasd and 30.99% on the New York. This was due to yesterday being an expiration day, but that combined with the price declines produced a new distribution day on all the major averages. Leading stocks were mostly lower as well with the leaders index declining 1.22% on huge volume. This was also largely due to the expiration day yesterday, but it still shows distribution in quality growth stocks. The index closed in the lower half of its trading range, but held above its 50dma. It remains in the narrowing space between its 17dma as resistance and its 50dma as support. The relative strength line of the index was again turned back at its 50dma resistance level. The market was weak yesterday. The major averages remain unable to break into new high ground and remain between the old highs above and their 50dma’s below. The leaders index is in similar territory. It has its 17dma as resistance above it while the 50dma remains as support below the index. The direction that the major averages and the leaders index break will tell us which way the market will go, at least in the short term. Jerry
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