Jerry Samet
02-13-2016, 12:06 PM
The market staged a good rally yesterday on a price basis. The major averages opened strong and climbed the rest of the session. All the major averages finished at or very close to their intraday trading highs. The INDU led the way with a gain of 2.0% while the COMPQ and SPY rallied 1.66% and 1.95% respectively. Small and mid cap stocks were also strong with the RUT gaining 1.92% while the MID rallied 1.86%. The problem with yesterday’s action was volume. It was lower across the board and while it was above average on the New York is was lower than average on the Nasd. This continues the pattern of declines on higher volume and rallies on lower volume. Leading stocks were strong as well with the leaders index gaining 1.42% and closing in the upper half of it’s trading range, but well below the intraday highs. Volume on the index fell from Thursday and was below average. The index put a little distance between itself and it’s important 200dma. The relative strength line declined as the gain in the leaders index was less than the overall market. The market has been declining since the start of the new year without any kind of snap back rally. I have been hoping for some kind of a rally that would allow for some short positions to be put on with a lower risk. We will have to see if yesterday’s rally has any legs with more upside action next week, and a rally could take the major averages back up to their declining 50 day moving averages without really changing the overall picture. We will have to wait and see how this plays out. Jerry