The market got hit hard again today. While they closed off their lows the major averages all lost ground, between .63% on the SPX and 1.04% on the COMPQ. Volume was higher across the board so the was an additional distribution day on all the major averages. Leading stocks again got hit harder than the overall market as the leaders index dropped 2.36% on higher and well above average volume. Quality stocks have been crushed in the last couple of days with many failing recent breakouts and stocks breaking below their 50dma’s on volume. The leaders index traded all day below it’s 50dma and closed below it for the first time. This is generally the final sign of a broken index. It has been eleven trading sessions since the index closed higher on above average volume. This much damage to leading stocks is not normal behavior in a rally and the damage to the major averages in the last two days is significant. Nothing is carved in stone in the stock market, but it seems the rally is over. I will be away this weekend so the updated will resume next week. Jerry
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