Jerry Samet
03-04-2020, 06:39 PM
The market is beginning to look like it is in a game of ping pong. The major averages rallied hard today, at least on a price basis. They opened higher and rallied pretty much consistently for the entire session. All the major averages closed at or very near their intraday trading highs. The percentage gains were large. The New York averages were a bit stronger with the SPX gaining 4.22%. The COMPQ and the NDX rallied 3.85% and 4.13% respectively. Volume was again lacking. It was lower by 17.64% on the Nasd and 21.95% on the New York. This continues the pattern of high volume declines followed by lower volume rallies. Not what you want to see. Leading stocks rallied as well with the leaders index gaining 3.67% on lower but above average volume. The index closed near the top of its trading range and right on the declining 9dma. The market continues to rocket back and forth, this time on election news. Biden won Super Tuesday in a big way and this reduced the chances that the extremely anti markets Sanders would win the nomination. I guess that the recent selloff had more to do with politics than we thought. We saw another high percentage rally with all the major averages showing more than 4% gains, except the COMPQ which was up 3.85%. There were also a couple of record point gains today. As I noted on Monday, the biggest up days occur during bear markets, so this is not necessarily the positive many are making it out to be. We are also seeing the rally days on lower volume than the selloff days. This is a negative volume signature. Overall the picture would have to be considered negative. Even if we get a follow through in the next few days it is unlikely to be well confirmed. Right now it is a very difficult market with volatility in both directions. I have always said that you should be in the market when it is easy to make money. It’s not easy now. Jerry