The market really got pasted today. After opening lower the major averages spent the rest of the session selling off. They all finished near the bottom of their intraday trading ranges, showing that there was little buying interest as prices fell. The Nasd averages led the way with the COMPQ and the NDX lower by 3.03% and 3.26% respectively. The SOX was off even more, declining 3.86%. The SPX fell by a still substantial 1.66%. Volume was lower across the board so there was no fresh distribution, but it was close, especially on the Nasd. Leading stocks were hit hard with the leaders index falling 5.88%. The index finished trading near the bottom of its trading range and it broke below its important 17dma for the first time since before the current rally attempt began. Volume was higher and above average, showing that there was real selling pressure in quality growth stocks. The selloff continued as prices fell throughout the day. Leading stocks were hit very hard and the leaders index fell below the 17dma. This is a level that the best growth stocks rally above. The index it now not far from its 50dma. A break of this important support would be even more negative. The COMPQ and the SPX remain above the lows of the rally day, but the COMPQ is close. Until this level is broken the rally attempt that began with the follow through on 11/7 is not officially over, but it is pretty hard to make a case that the follow through has not failed. There have been a lot of declines in the last two or three years that were cut short as prices returned to new highs, but this one feels different. You never know until you have reached the magic 20% level, but is getting easier to make the case that we are in a bear market. Jerry
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