The market was lower today after Moodys lowered its ratings on a bunch of regional banks. The major averages opened lower on the news and after some more selling found a bottom and recovered much of the losses. All the major averages finished near their intraday trading highs. The Nasd averages were weakest with the COMPQ and the NDX falling by .79% and .87% respectively. The SPX declined .42%. Volume was higher across the board, showing that large institutional players were selling today. It also added a new distribution day to all the major averages. Leading stocks were lower as well with the leaders index off by .77% on the session. The index closed in about the middle of its trading range on higher but slightly below average volume. The news of the Moodys downgrade hit the market and there were significant declines early. The major averages recovered much of the early losses and the closing decline was due to the opening gap down. The recovery from the bottom was good but the day’s action added to the correction scenario. The leaders index is still holding up pretty well and it is still in a consolidation pattern. The major averages have been weaker and they all came close to their respective 50dma’s at today’s lows. We are now in a seasonally weak period as August and September have historically been down months. The correction scenario is still in place. Jerry
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