The market got hit pretty hard today. After opening lower the major averages spent the rest of the session working their way lower. The Nasd averages were hit the hardest due to weakness in big cap tech stocks. The COMPQ and the NDX fell 2.60% and 2.57% respectively. The SPX declined 1.84%. All the major averages finished near their intraday trading lows. Volume was mixed. It fell 5.92% on the New York and rose 13.31% on the Nasd. This produced a new distribution day on the Nasd averages. Leading stocks were lower as well with the leaders index falling 2.76% on the day. Some ETF’s of leading stocks dropped more. The index closed low in its trading range on higher volume. The index also broke below its important 50dma. Today’s action was very negative as the market reacted to higher interest rates. The major averages were hit hard and broke important support. The COMPQ closed below its 200dma. History has shown that most corrections are contained at the 8% level. If they go past this point the odds of an intermediate term correction increase dramatically. The Nasd averages are now below this level, making the chances of this developing into at least an intermediate term correction large. The New York averages have not declined this much, yet. I see no reason to be holding trading positions right now. Jerry
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