About the best thing you could say about today’s action is that it could have been worse. After a brief early rally attempt the major averages sold off into the close and finished in the lower half of their trading ranges. The Nasd averages again led the way down with the COMPQ off .54% while the SPY was lower by .19%. Volume was mixed, higher on the New York but lower on the Nasd. That combined with the .19% decline in the SPY was border line distribution on the index. Leading stocks again sold off with the leaders index lower by .23% in the highest volume in over a month. The index closed clearly under the critical 50dma and is starting to live under it. There are five down days in a row in the index all on heavy volume, producing a really ugly chart. The Nasd averages look pretty similar to the leaders index with a big price decline in the last week on large red volume spikes. The New York averages are holding up better, largely to the larger cap and more defensive nature of their component stocks. At this point it is hard to know if the market will rally back to new highs as it has in the recent past or break down into a larger correction. The eight percent down level on the COMPQ is an important level to watch. This is at the 4065 level, just under one hundred points below today’s close. If it breaks this level an intermediate term correction, or worse, is likely. Jerry
Reply With Quote