Leaders Index 5-4-22

The market had a wild ride today. The major averages were moderately lower on the Nasd and moderately higher on the New York before the announcement. After the announcement they bounced up and down until Powell at his press conference said there would be no 75 basis point rate increases. The major averages rocked higher after that and they all closed near their intraday trading highs. The Nasd averages were the strongest with the COMPQ and the NDX gaining 3.19% and 3.41% respectively. The SPX was higher by 2.99%. Volume was higher across the board. It gained 22.06% on the Nasd and 13.22% on the New York. Leading stocks were higher as well with the leaders index gaining 2.93% on the day. The index closed high in its trading range and cleared its short term moving averages. Volume was lower and below average. The market was lower overall until Powell’s remarks about no 75 basis point increases. The market took off and rallied into the close. There were strong gains, but I suspect they were a bit of an overreaction. There will still be several 50 basis point increases in the future. Many times the action on Fed announcement days is mostly reversed the next day. Tomorrow’s action will be informative. On the positive side there are some encouraging signs. There was a Eureka signal today showing strong market internals. A couple of the other shorter term items I look at are acting better. The WOO also turned positive today. We may see some upside action here, but I think if it happens it will be limited. Today’s rally had a lot of the look of a strong up day in a bear market. Jerry