The market really got pasted today. The futures showed large losses before the open and the major averages were down all day. Late weakness saw all he major averages finish at their intraday lows, a sign of weakness. The COMPQ was off 1.67% on the session while the SPX fell 1.70%. Volume was higher across the board, so there was distribution on all the major averages. The distribution count is getting high now, which is a big red flag. Leading stocks sold off along with the overall market with the leaders index falling 1.97% on higher and above average volume. This shows distribution in quality growth stocks as well. The index closed below it’s important 17dma, breaking important support for leading stocks. The relative strength line of the index is however holding up pretty well. Today’s action was very negative. We are beginning to see a pattern of big declines on high volume and rebounds on weak volume. Not the pattern associated with strong markets. Also the SPX broke below it’s 50dma today. Breaking this important support level on heavy volume is worrisome. The next couple of day’s action will be critical. If there isn’t a strong rebound on heavy volume the market will likely head lower. jerry
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