We had another strange session today. The market opened lower and traded in negative territory almost all day. The major averages dropped at the open and had some meaningful losses. Those declines continued until about the last half hour of trading when buying came in and the market rallied to about unchanged. The SPX was higher by .03% while the COMPQ fell .04%. Weakness in large cap tech stocks saw the NDX decline .23%. There was strength in the small cap stocks with the RUT gaining 1.23%. All the major averages closed at or very near their intraday trading highs. Volume was higher across the board. Up by 11.97% on the New York and 13.16% on the Nasd. Leading stocks were again hit hard. The leaders index fell 3.07% as many components fell hard and broke support. The index traded below its critical 50dma but closed right on this moving average support. It closed in the lower half of its trading range. Volume was higher and very heavy. In fact it was the highest volume since 5/9. The relative strength line of the leaders index also fell below its 50dma. This shows that quality growth stocks are acting much worse than the overall market, usually not a good sign. The market was showing some real weakness today and it looked like we were on our way to another distribution day. A rally in the last half hour of trading pretty much erased those declines and the major averages closed about unchanged on the day. It looked a little unusual to me. The market continued its split personality again today. Relatively benign action covered up real weakness in leading stocks. Divergences like this are more often than not decided in favor of the leading stocks. The COMPQ traded below its 50dma today but closed above it. The leaders also traded below this important moving average and closed right on it. The high closes in the major averages on higher volume would usually be considered positive, but this one didn’t feel right. The COMPQ and the leaders index must hold support at their 50dmas. I will be away for a few days. The updates will resume on Monday. Jerry