The market continued weak action today after a decline Friday. The major averages opened lower but rallied to recover about half of the early losses. All the major averages finished in about the middle of their intraday trading ranges. All closed with over one percent losses. The COMPQ and the NDX fell 1.19% and 1.28% respectively. The SPX lost 1.07%. Volume was higher across the board, producing a new distribution day on all the major averages. Leading stocks were lower as well with the leaders index losing 1.13% on the day. The index closed in the upper half of its trading range on higher but still very light volume. The rally is showing increasing stress as the Santa rally fizzles. The charts of the major averages and the leaders index both look a bit sickly. The SPX broke back below its 50dma today, a negative development while the COMPQ broke below its 21dma. The index has three down days in a row on increasingly higher volume. The distribution count is pretty high and leading stocks are not acting well. The rally is looking increasingly shaky and appears to be in some trouble. We are still in a seasonally positive period, but it doesn’t seem to be working right now. Jerry
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