It was an ugly session today. The market sold off hard at the open and spent the rest of the day in a trading range. The major averages fell about one percent with the COMPQ down 1.11% and the SPX lower by 1.03%. A small gain near the close allowed them to finish off their lows but all the major averages closed near the bottom of their intraday trading ranges. The SPX is now just above it’s 50dma. Even more worrisome than the price decline was the increase in volume. It was higher across the board by a meaningful amount. This shows that large institutional players were selling stocks. It was distribution across the board. Leading stocks sold off as well with the leaders index declining 1.33% on the day. The index tagged it’s 9dma during the session but closed well above it and in the upper half of it’s intraday range. Volume on the index was lower, so there was no distribution here, and about average. This is the first real day of heavy selling since the follow through and the chart of the leaders index still looks ok. It remains however a tough market to make progress in. Leading stocks can get hit hard on any weakness, and usually pretty quickly. A good deal of caution is probably a sound idea. Jerry
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