Jerry Samet
08-08-2019, 07:33 PM
The market staged a powerful rally today and closed with strong gains. After opening higher the major averages rallied for pretty much the entire session. All the major averages closed at or very near their intraday trading highs, a sign of support. The Nasd averages were the strongest with the COMPQ and the NDX gaining 2.24% and 2.29% respectively. The SPX was higher by 1.88%. Volume was the issue. It was lower across the board. Esignal has the New York volume down by 13.87%, clearly lower. It has the Nasd volume off by 1.58%. This is fairly close so you have the situation where different data feeds can have different results, but it looks like enough to say that Nasd volume was lower. Leading stocks had a strong session with the leaders index higher by 3.22% on the day. It closed high in its trading range and made a new all-time closing high, but not an intraday high. Volume was much higher and well above average, showing real buying pressure in these stocks. The relative strength line of the leaders index is also in new high ground. It is encouraging when quality growth stocks outperform the overall market. The price gains were strong today and well divided among all stocks. Leading stocks are leading again. The leaders index held support at its important 50dma during the sell off and has moved into new high ground. This was accompanied by higher and above average volume, just what you want to see. The Nasd averages and the SPX also regained their important 50dma’s, just what you want to see. The question today was the volume. It was there in leading stocks, but not in the major averages. Breaking above the 50dma on lower volume is a little dangerous. This was the third day of a rally attempt and couldn’t really count as a third day follow through, mostly because of the lower volume. We are now on the lookout for a follow through starting tomorrow. If we get a convincing one we could rally back to the recent highs in the market. We will have to see how it plays out. Jerry