The market put in a very negative session yesterday, pretty much giving up Thursday’s gains. The major averages gapped lower at the open after disappointing earnings reports before the open. All the major averages finished near their intraday trading lows. The COMPQ and the NDX fell 1.62% and 1.66% respectively. The SPX declined 1.46%. Volume was mixed, higher on the New York and lower on the Nasd. That produced a new distribution day on the New York averages. Leading stocks sold off as well with the leaders index falling 2.26% on the day. The index closed low in its trading range on higher but below average volume. The market reversed most of Thursday’s gains on poorly received earnings reports and fears of escalation in the middle east. The major averages opened lower and were mostly down all day. The screens were a sea of red. The market is acting more and more like it is topping out. I think the rally is pretty much over and we are in the early phases of an intermediate term correction. The major averages broke important support on Friday and I believe we will see lower prices ahead. Jerry
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