The market was lower today for most of the session. The major averages opened lower and continued down until there were sizable losses. The major averages bottomed out and rallied off their lows but could not get back into positive territory. The New York averages were again the strongest with the SPX declining .34%. The COMPQ and the NDX fell .73% and .70% respectively. All the major averages closed high in their intraday trading ranges, showing some support. Volume was lower across the board. It fell 14.17% on the New York and 7.26% on the Nasd. This shows that large institutional players were not heavy sellers today. Leading stocks were lower as well with the leaders index falling .61% on the session. The index closed high in its trading range and volume was higher but still below average. This shows distribution in quality growth stocks. The market continued its corrective action today, although the selling pressure was not that strong. Volume declined across the board and this means that there was no distribution today in the major averages. Large institutional players were not dumping stocks heavily today. The leaders index broke below its short term 9dma but held its important 17dm. This is encouraging. Two of the shorter term indicators I look at, the Summation Index and the A’s minus E’s, which have been declining, have both turned up in the last few days. This along with some accumulation under the surface lead me to believe that the recent market weakness is a short term function of being extended and not the end of the current rally. I could be wrong here and more weak action in the near term could prove that assessment wrong. For now the weight of the evidence points to a continuation of the rally. Jerry
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