After some eventful action last week the market was weak overall today. The major averages opened lower and were in negative territory all day, although they finished off their lows. All the major averages closed in about the middle of their intraday trading ranges. The COMPQ and the NDX fell .92% and .79% respectively. The SPC fell .60%. Volume was higher across the board, producing a new distribution day on all the major averages. Leading stocks were lower as well with the leaders index declining 1.05% on the day. The index closed high in its trading range on higher and above average volume. The index also held its 9dma. The market last week got rocked by two higher than expected inflation reports. Overall the major averages did alright in the face of this negative news, but there was some negative action under the hood. Some leading stocks are starting to act poorly. The action in SMCI on Friday is a big caution sign. There are other leading stocks producing similar action. NVDA today looked something like that today. It will announce earnings after the close on Wednesday, and that will be pivotal to the rally. If the report is good, it could reignite the rally and move the market higher. If not, it could trigger a sell off. We should take a good look at the rally right now. It is fast approaching four months old. While there have been rallies that have run longer, the current move is certainly a senior citizen. The action in certain leading stocks is also a growing cause for concern. Most of the short term indicators, and some of the intermediate term ones are flashing warning signals. If NVDA delivers a blow out report tomorrow it could drive the market higher, but the risks are increasing substantially. Reducing exposure somewhat is probably a good idea. Jerry
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