The market got hit pretty hard today. The major averages opened moderately lower and sold off from there. They went sideways late in the day and all the major averages finished near their intraday trading lows. The Nasd averages were hit the hardest with tech and growth stocks selling off hard. The COMPQ and the NDX fell 2.14% and 2.16% respectively. The SPX declined 1.30%. Volume was lower across the board in the only bright spot in today’s action. It fell 3.60% on the New York and 4.02% on the Nasd. Leading stocks continued their weakness with the leaders index falling 2.73% on the day. The index closed in about the middle of its trading range on slightly higher volume. The correction continued today with all the major averages and the leaders index making new lows for the move. That erased Friday’s rally day. Leading stocks, and growth stocks in general, continued to sell off hard as the current correction deepened. The COMPQ has now declines about 7% in this rally. The 8% correction level is critical as most corrections of shorter duration hold at this level. When it is crossed the chances of a much larger decline become very real. At this point we seem to be looking at an intermediate term correction, at the least. October is usually a poor month for the market, but a lot of bottoms are put in during this month. After this we enter a seasonally positive period and could see a rally. Right now the sidelines is the best place to be as there is a lot of risk that the market could decline further. Jerry
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