The market got hit hard yesterday, ending the current rally attempt. The major averages opened slightly higher, but the selling quickly came in and lasted most of the day. All the major averages finished near their intraday trading lows. The NASD averages again took the worst of it with the COMPQ and the NDX falling 2.55% and 2.69% respectively. The SPX declined 1.73%. Volume was higher across the board, producing distribution on all the major averages. Leading stocks were hit as well with the leaders index falling 1.60% on the day. The index closed in the lower half of its trading range on higher and above average volume. The market sold off hard yesterday after the employment report came in weak. Recession fears grew with the below expectations number and the revisions for the last two months. The SPX followed the NASD averages by breaking below its 50dma and the lows of the follow through day were taken out. This officially ends the rally attempt by IBD rules and confirmed that the follow through of 8/13 has failed. This is not surprising considering the time of year. September is a seasonally very weak month and the chances of anything developing here are slim. Once we get into the October time frame things change. A lot of important market bottoms have occurred in this time frame. We have recently had two poorly confirmed follow through days that have both failed. The weekly Coppock is now trending down strongly and should hit the zero line late this month. That would set it up to signal in the October to early November time frame, like it did last year. A defensive posture until then is warranted. Jerry
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