The market moved further into corrective territory today. The major averages opened a bit higher but couldn’t hold the gains. Selling came in and all the major averages finished near their intraday trading lows. The COMPQ and the NDX fell 1.15% and 1.24% respectively. The SPX lost .58%. Volume was lower across the board. Leading stocks were weaker as well with the leader’s index falling .93% on the day. The index closed low in its trading range on lower and below average volume. The index also closed below its 50dma. The selling continued as the market correction deepened. It is very hard to make the argument that we are not in a correction as both the major averages and leading stocks are breaking important support. The question now is how deep the decline will be. Most corrections are short term and are confined to 8% declines or less. When you go below 8% it is mostly certain that there will be an intermediate term correction that could last several months. We are coming into the summer months that are historically unfriendly to new intermediate term rallies. Watch the 8% levels in the major averages to see if they hold. I will be away for a few days. The updates will resume on Monday. Jerry
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