After two strong sessions including a follow through on Thursday, the market put in a mixed session today. The major averages opened lower and spent most of the day in mildly negative territory. The major averages closed with moderate declines compared to the gains of the last two days. The SPX lost .63% while the COMPQ and the NDX declined .41% and .31% respectively. Volume was higher across the board. It gained 3.22% on the Nasd and 17.88% on the New York. Since there was a follow through on Thursday I created a new leaders index. A list of the contents is in a text file. It contains 21 Stocks in 12 different industry groups. It is a little heavy in energy stocks, but that s where the main leadership is. After great action up to Friday the index got hit hard today with a 4.78% decline on very heavy volume. The index closed low in its trading range. The market looks like it is trying to generate a rally after the follow through and there are some supportive items out there. Today’s action was distinctively mixed. The declines were moderate compared to the gains of the last two days and the major averages held some support. But the decline today combined with the higher volume constituted a distribution day on all the major averages. The big sell off in the new leaders index on such heavy volume is also worrisome. The market is trying to rally. The target for the major averages would be their respective 50dma’s which are not that far above current levels. That moving average will be significant resistance. A distribution day so close to a follow through is a big negative so this rally attempt should be treated with a good deal of caution. Jerry
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