Jerry Samet
03-12-2016, 11:16 AM
The market had a strong session yesterday. The major averages opened with solid gains and worked their way higher for the rest of the day. There was solid buying throughout the session and all the major averages finished at their intraday highs. The COMPQ led the way higher with a gain of 1.85% while the SPX was higher by 1.64%. The greatest strength was in the small caps and the semiconductors with the RUT rallying 2.22% and the SOX gaining 1.94%. The SOX has regained it’s 200dma again after just losing it and all the major averages are in new high ground for the move. The New York averages have been the strongest in this rally and the big news of the day is that the SPX and the DOW cleared their 200dma’s. This is important as it is a major hurdle and if they can hold this moving average and build on their gains it will be a big positive for the market. The real negative on the session was again volume. It was lower across the board and well below average. This shows that large institutional players were hot heavy buyers in yesterday’s advance. Leading stocks were higher as well with the leaders index rallying 1.03% on lower and well below average volume. In fact the index has not had above average volume since 2/17, the day of the follow through. The index finished in the upper half of it’s intraday trading range and is now right at the top of it’s recent consolidation. If it can break above this consolidation with some conviction it would be a big positive. The relative strength line of the index has been headed lower as the index consolidates while the major averages work their way higher. The rally is still intact and the market is working it’s way higher, but there are two problems with this rally. It has been on light volume and few quality growth stocks are producing worthwhile gains. It would be good to see these two items improve. For now it is still difficult to make real progress in trading accounts, but some exposure is warranted. Jerry