Jerry Samet
08-14-2017, 10:26 PM
The market took a hit last Thursday on fears of an escalation of the North Korea situation. The market and leading stocks both were hit hard. The last two days the major averages have tried to recover and have done all right on a price basis. Today was a strong session with the major averaged opening higher and holding the gains nicely all day. The COMPQ led the way with a gain of 1.34% while the SPX rallied 1.00%. The greatest gains were in the semiconductor stocks with the SOX higher by 2.58%. All the major averages closed at the top of their intraday trading ranges, a good sign. Volume has not been cooperating as it was lower across the board. Leading stocks have been outperforming the overall market with the leaders index higher by 2.56% today and it closed in the upper half of its trading range. The index made new highs on both a closing and an intraday basis and the relative strength line of the index did also. The index held support well at its 17dma. The problem again was volume, it was lower, showing that large institutional players were not heavy buyers. After an ugly decline like we had last Thursday the quality of the bounce is critical. There has been a nice bounce on a price basis, but the volume has not been there. We must see a rally confirmed by strong volume to overcome the weakness of last week. Without that the charts of the major averages and the leaders index are taking on a wedging look. Jerry