The market got slammed today. The major averages opened with solid gains in what looked like a continuation of recent strength. It didn’t last long as weaker than expected economic news started coming in, starting with the consumer confidence report. The market started selling off and it continued into the close. All the major averages finished near their intraday trading lows. The Nasd averages took the worst of it with the COMPQ and the NDX fell 2.98% and 3.09% respectively. The SPX lost 2.01%. Volume was higher across the board, according to TOS, but it was very close on the New York. Volume gained 8.67% on the Nasd and .44% on the New York. Leading stocks were lower as well but lost less than the overall market. The leaders index fell 1.19% on the day and closed in the lower half of its trading range. It tried to break above its 50dma early but couldn’t hold on. Volume was slightly higher but still below average. The market took a serious hit today with large losses on all the major averages. The strong open and weak close is the sign of a market that wants to go lower. There were several weaker than expected economic reports that the market didn’t like. There was consistent selling into the close. Two very negative items occurred today. First there was a distribution day only two days after a follow through. It almost always kills a rally attempt when there is distribution within three days of the follow through. Also the COMPQ and the SPX undercut the lows of the follow through day. This is also almost always fatal to a follow through. It looks like this will be just another follow through in a bear market that quickly fails. This is almost always the case with poorly confirmed follow throughs. It is only a matter of time until it becomes “official”. Jerry
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