The market took a break today after its recent advance. The major averages opened a bit lower and after a brief rally attempt failed they spent the remainder of the session in negative territory. The losses were pretty contained and the Nasd averages were the weakest. The COMPQ and the NDX were off by .69% and .77% respectively. The SPX fell .34%. The New York averages finished in the upper half of their intraday trading ranges while the Nasd averages closed in the lower half of their trading ranges. Volume was higher across the board. It rose 32.06% on the Nasd and 6.59% on the New York. This was enough to produce a new distribution day on all the major averages. Leading stocks sold off harder than the overall market with the leaders index falling 2.43% on the day. The index closed in the lower half of its trading range, but held its short term 9dma. Volume was fractionally higher than yesterday, showing distribution in quality growth stocks as well. The market had a mild sell off today. The declines were pretty small compared to the recent advances and a rest at this point would make sense. The NDX made a new high today on an intraday basis but didn’t close in new high territory. It would have been better to have lower volume, but the distribution count is still low. It does show that large institutional players were selling stocks today. In the context of the recent advance the damage done by today’s action was minimal. After a strong rally in the last few days today’s decline doesn’t look like much in the charts of the major averages or the leaders index. These kind of rest stops are common in an advance and actually positive. We should see the market move into new high ground. How high it will go we don’t know yet. jerry
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