The market pulled back today with moderate declines. The major averages opened lower and traded in negative territory most of the day. The Nasd averages were the weakest and they closed low in their intraday trading ranges. The New York averages closed in the upper half of their trading ranges. The COMPQ and the NDX lost .55% and .54% respectively. The SPX declined .17%. Volume was mixed, declining on the New York and rising on the Nasd. That combined with the price decline produced a new distribution day on the Nasd averages. Leading stocks did a little better than the overall market with the leaders index gaining .28% and closing high in its trading range. Volume was lower and below average. The market gave some ground today, but the losses were not to bad. The Nasd averages got a distribution day, but all the major averages are still within the consolidation they have been in for over a week. Futures are down a bit as CRM’s earnings report was not well received. The PCE report coming out before the open tomorrow has the potential to move the market if it differs from expectations by much. Right now we should watch to see which way the market breaks from its current consolidation. If it breaks down the rally will be in some trouble. If it breaks up the rally could go on for a while longer. We must remember that the current rally is now four months old and is reaching the limits that most rallies are contained at. It doesn’t mean it is over, but being more conservative now than early in the rally is warranted. Jerry
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