The market had a nasty reversal today. After some early strength that had the major averages showing some modest gains it looked like the major averages would build on yesterday’s rally. The market peaked less than an hour and a half into trading and began a steady decline that saw all the major averages finish at their intraday lows. The SPX led the way down with a loss of 1.10% while the COMPQ fell .64%. Volume was higher across the board and above average on the Nasd. This produced distribution on all the major averages and this week’s action has seen higher prices on lower volume and declines on higher volume. The distribution count is at uncomfortable levels. Leading stocks were hit as well with the leaders index falling 1.36% on higher but still below average volume. The index finished low in it’s intraday range, a sign of weakness. The overall direction of the market still seems to be higher, but it has been a tough slog. The distribution count is at levels that usually can kill a rally, but we are in a seasonally positive period. The course of the market will be largely determined by the results of the employment report due out on Friday and the results of the next Fed meeting. While few stocks are producing large gains there are some gains to be made. Jerry
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