Jerry Samet
03-10-2020, 06:34 PM
The market put on another wild session today. The major averages opened higher, but couldn’t hold the gains and quickly sold off into negative territory. After bouncing around for a while late buying came in and the market rallied into the close. All the major averages closed at or very near their intraday treading highs, a good sign. The COMPQ and the NDX were higher by 4.94% and 5.34% respectively. The SPX gained 4.94%. Volume was lower across the board. It declined 2.74% on the Nasd and 9.80% on the New York. While the absolute level was high it continues the pattern of lower volume rebounds. Leading stocks were strong gainers as well with the leaders index rallying 4.74% on the day. The index bounced off the 200dma and closed high in its trading range. Volume was lower but above average. The relative strength line of the index has now broken below its 50dma. The market had a bit of a whipsaw session today where early gains were lost only to be recaptured late in the session. News of a stimulus program helped spark the rebound. The major averages regained much of yesterday’s losses and only yesterday’s gap down was left unfilled. The strong close was good, but lower volume continued the pattern of higher volume selloffs followed by lower volume rebounds. You always want to look to the quality of the bounce after a big decline. This one only qualifies as ok. Also big percentage rally days are not always a good sign. We are experiencing extreme volatility right now and this could produce a follow through day. If it does we must remember that the first follow through after a good sized decline does not always work. If it occurs it will be important to check the three confirming indicators to see how likely it is to succeed. Right now the beach looks pretty good. Jerry