The PPI report came in lower than expected and it set off an early rally. The major averages opened higher and moved up for a short while. Selling then came in and the major averages reversed lower and all closed near their intraday trading lows, The Nasd averages were hit hardest as tech stocks were weak. The COMPQ and the NDX fell .58% and .65% respectively. The SPX declined .07%. Volume was higher across the board. It gained 15.27% on the Nasd and 4.06% on the New York. This was enough to produce a distribution day on the Nasd averages. The decline in the SPX was to small to qualify as distribution. Leading stocks were mixed with the leaders index gaining .13% on the day. The index made a new high but closed low in its trading range. Volume was higher and above average. The market had solid gains early, but they faded by the close in a negative reversal. The PPI looked like it would produce a strong rally like the CPI did yesterday. The gains didn’t hold and it turned into a distribution day. The rally still looks like it is in force, but the market s flashing some warning signs. The reversal today looks a lot like the one on Monday which was reversed by good economic news. It will be interesting to see how the market trades without any major news imminent. Jerry
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