The market weakness continued today. After a solid open the major averages quickly rolled over and sold off for most of the remainder of the session. All he major averages finished low in their intraday trading ranges. The declines were pretty evenly divided with the COMPQ and the NDX declining 1.12% and 1.13% respectively. The SPX fell 1.10%. Volume was higher across the board. It gained 9.13% on the Nasd and 11.87% on the New York. Leading stocks were lower as well with the leaders index falling 2.69% on the day. The index closed low in its trading range on much higher and above average volume. The market opened higher today and it looked early like there could be a bounce back. It didn’t last as selling came in almost immediately. Selling intensified as better than expected economic reports stoked fears of higher interest rates. The selling was wide spread and included small and mid-cap stocks as well as semiconductors. All the major averages broke through their respective 50dma’s today on higher volume. This amounted to distribution on all the major averages. This was a major failing as the 50dma was major support. There isn’t a lot of support until we get back to the June lows where the bear market rally began. It is likely that all or most of the gains from that rally will be erased. It looks like we are entering the third down leg of this bear market, and hopefully the final one. We could see the market hold above the June lows, as it did in 2002 and 2003 or it could take out those lows. We will have to see how it plays out. Jerry
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