It was a volatile day. After an early selloff it looked like it would be another ugly session with all the major averages off sharply in the first hour or so. There was then a rally followed by another small decline after Yellen started talking. A later rally took the major averages to their intraday highs where they closed. The New York averages led the way with the SPY closing up by .56%. The COMPQ was much weaker and although it too rallied off it’s lows it still closed lower on the day by .32%. Volume was much higher across the board and well above average. There was a reversal on the day but the COMPQ and the NDX finished in distribution territory. Leading stocks continued weak with the leaders index closing down by .87% on the session. The index closed in the upper half of it’s intraday range, which is usually good, but looking at the chart of the index it is hard to get excited. There is still a well defined down trend line that is ruling the chart and a less well defined trend line along the bottoms that look like they are forming a triangle pattern. Volume on the day was higher but still below average. The index remains below both the 17dma and the 50dma. The future direction will likely be decided by which trend line is broken first. The relative strength line of the index also continues to weaken. Overall it looks like a real divergence is forming. Quality growth stocks along with the Nasd averages and the small caps look like they are in a down trend while the New York averages remain near their highs. Most of the action now is in defensive stocks and the energy sector. These are not the type of stocks that generally lead a sustained rally. The fact that quality growth stocks are doing badly says a lot. This market is looking more and more like it is putting in a major top similar to what we saw in 2007. There may continue to be some strength in narrow sectors for a while, but this is a risky environment where caution is advisable. Jerry