The market had an overall disappointing session today. The major averages opened higher and rallied to some decent gains early. They didn’t hold and selling came in. The NASD averages finished low in their intraday trading ranges while the New York averages closed in about the middle of their trading ranges. The COMPQ and the NDX were higher by .07% and .19% respectively. The SPX gained just .08%. Volume was lower across the board. Leading stocks were mostly lower on the day, but the leaders index managed to produce a .96% gain. The index closed low in its trading range on lower and very light volume. The market looked early like it might continue Friday’s moderate bounce. It didn’t last long as the early gains were mostly wiped out and the market closed weak. Strong opens and weak closes are the sign of a weak market. I believe we are in a correction and the market will go lower from here in the historically weak August and September months. The question now is how far it will go. That is impossible to know in advance, but the COMPQ is now down about 8% from its highs. This is a level where a short term correction can turn into an intermediate term one. Most corrections are contained at less than the 8% level, but those that are not usually become intermediate term corrections. We will have to see if that happens now, but the recent action of the market and the time of year suggest that an intermediate term correction is the most likely outcome. Jerry
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