Jerry Samet
10-03-2019, 06:26 PM
The market put in almost a mirror image of yesterday. The major averages opened lower and it looked like it would be another negative session. There was a big decline when the services numbers came in weaker than expected. They then made a bottom and rallied the remainder of the session. The most strength was in the Nasd averages with the COMPQ and the NDX gaining 1.12% and 1.16% respectively. The SPX rallied .80%. All the major averages closed at or very near their intraday trading highs. The problem was again volume. It was lower across the board, dropping 9.32% on the New York and 13.94% on the Nasd. This continues the recent pattern of high volume declines followed by lower volume rebounds. Leading stocks had a good session, better than the overall market. The leaders index rallied 1.98% on the day. It closed right at its intraday trading high and volume was higher and above average. After a big decline you look to the quality of the bounce to try and determine if the worst is over. Today’s action was mixed. The price gains were solid. The major averages held above their 200dma’s but remain well below their 50dma’s. The problem again was volume. It was well lower than yesterday. This shows that large institutional players were much bigger sellers of stocks in the previous two days than they were buyers of stocks today. There are also head and shoulders patterns in the charts of the COMPQ and the SPX, the two most important major averages. The major averages must first break above their 50dma’s with some conviction and the leaders index must get above its short term 9dma and 17dma. The action today might have improved the picture in some small way, but it was muted. Jerry