Jerry Samet
02-01-2021, 06:30 PM
The market staged a strong price rally today after Friday’s weakness. The major averages opened higher and rallied for most of the session. All the major averages closed at or very near their intraday trading highs, an encouraging sign. The greatest strength was in the Nasd averages as there was a lot of strength in the big cap tech stocks. The COMPQ and the NDX gained 2.55% and 2.50% respectively. The SPX rallied 1.61%. The semiconductors saw the greatest strength with the SOX higher by 3.91%. Volume was disappointing. It fell across the board, declining 9.47% on the Nasd and 14.49% on the New York. This is not encouraging as and it shows less buying pressure today than there was selling pressure on Friday. Leading stocks had a good session as well with the leaders index gaining 3.59% on the day. This more than makes up for Friday’s losses and the index closed high in its trading range. Volume was lower and well below average. The market rallied today, seemingly on increased hope of a stimulus bill as Republican senators met with the White House. The action today was positive as most or all of Friday’s losses were recovered, depending on the average you look at. The lower volume today was a concern. It continues the pattern of higher volume declines followed by lower volume rebounds. You want to see the quality of the bounce after a decline. The lower volume today took a lot out of the great price action. There will be several important tech companies and the results of those reports will have a lot to do with the direction of the market in the short term. Jerry