Jerry Samet
05-16-2020, 11:26 AM
The market staged a nice positive reversal yesterday. The major averages opened with losses and sold off to some decent declines in the first half hour or so. They then found a bottom and rallied into the close. All the major averages finished at or very near their intraday trading highs, a sign of support. The Nasd averages were a little stronger with the COMPQ and the NDX gaining .78% and .64% respectively. The SPX was higher by .39%. Volume as mixed. It was higher by 3.28% on the Nasd and lower by 13.45% on the New York. Leading stocks had a strong session with the leaders index gaining 2.79% on the day. It closed high in its trading range and held support at its short term 9dma. Volume was higher and just below average while the relative strength line of the leaders index made new highs for the move. The action of the market yesterday was encouraging. There was early weakness and a strong close, which is a sign of a strong market. Positive reversals are a sign of support as buyers came in to take advantage of lower prices. Leading stocks are acting well. The leaders index had a pullback after an advance to new highs and it looks like it will be contained at short term support. The index bounced off its 9dma on volume, a good sign. The relative strength line of the index is at new highs, showing that quality growth stocks are outperforming the overall market. There are still a couple of negatives out there, but overall the weight of the evidence points to a continuation of the rally and higher prices ahead, in at least the short term. Jerry