The market put in a pretty negative session the first trading day of the year. The major averages had solid gains early, but they didn’t hold. Selling came in and the major averages declined most of the day. Some late buying came in and they closed off their lows but all the major averages finished in the lower half of their intraday trading ranges. The Nasd averages were the weakest with the COMPQ and the NDX falling .76% and .70% respectively. The SPX lost .40%. Volume was much higher across the board, as you would expect on the day after the last trading day of the year before a long holiday weekend. Leading stocks were hit as well with the leaders index declining 2.96% on the day. Much of this decline was caused by weak energy stocks. The index closed low in its trading range on much higher and slightly above average volume. The market started out strong but quickly reversed lower. It was a weak session overall with higher volume and a price reversal. As I said over the weekend I think the early part of the year will be weak followed by a bottom sometime in the spring or summer. It is too early to tell when the bottom will be put in, but I believe that this time frame is most likely. There is some important economic news coming out later this week and earnings season kicks in next week. The level of earnings is up in the air and how they actually come out will have a big impact on the market. Jerry
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