The market started out strong today with the major averages up one percent or more early. All the major averages topped early(the COMPQ in the first five minutes) and then sold off into the close and finished at or near their lows of the day. The New York averages lead the way while the Nasd averages were weak. Volume was higher across the board and the COMPQ just missed a distribution day. Leading stocks also started off strong and sold off in a reversal pattern. The leaders index closed very close to it’s lows and up only .53% on the session after much larger early gains. Volume was higher on the index and about average. The index held it’s 9dma, so it is still technically solid, but this is the second time it bounced off this moving average. Today’s action is troubling. The market, both the major averages and leading stocks reversing off their highs on higher volume. The COMPQ closed down on the day and had a clear cut reversal. The market and leading stocks must rally convincingly from here or the outlook will darken. Jerry
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