Jerry Samet
02-24-2016, 06:57 PM
The market staged a fairly impressive reversal today. After opening lower and building some sizable losses early as oil sold off, the major averages found a bottom a little more than an hour into trading. As oil staged a rally off early losses to finish higher the market followed suit and moved into positive territory. All the major averages finished at their intraday trading highs, a sign of strength. The COMPQ led the way higher with a gain of .87% while the SPX rallied .44%. The most strength was in the semiconductors and the small caps with the SOX and the RUT gaining 1.40% and .98% respectively. Another positive in today’s action was volume. After falling for the last few days it increased nicely today, showing that large institutional players were active. Leading stocks participated as well with the leaders index gaining 1.35% on higher but slightly below average volume. There is a big white candle on the chart showing the index closed very close to it’s intraday high after a wide trading range. The index made new highs on both a price and a relative strength basis. The kind of reversal we saw today often leads to higher prices in at least the short term. The market right now is highly correlated to oil so it is hard to predict where it will go. Today’s action improves the picture, but the real test for the major averages will be the 50dma. Jerry