Leaders Index 2-6-14

The market had a solid rally today on a price basis. It opened higher and the major averages rallied through out the day to finish at their highs of the session. The New York averages led the way with gains of 1.24% on the SPY and 1.34% on the NYA. The COMPQ was up 1.14% to bring up the rear. The issue again was volume. It was lower across the board and continued the pattern of rallies on lower volume and declines on higher volume. This shows that large players are net sellers not net buyers. Leading stocks had a good up day as well as the leaders index rose 1.49%. This was slightly higher than the overall market. The problem here as well was volume. The index again rose on lower and below average volume. It remains below it’s 50dma and just below a declining 9dma. The charts of all the major averages are telling the same story. They all rallied today right up to their declining 10dma’s. This short term moving average right now is ruling the charts. The first step in repairing the recent damage and resuming the rally would be for the major averages to break above this moving average, better with volume. The 50dma would be the next hurdle. Tomorrow’s action will be critical. It the major averages are turned back by the 10dma then lower prices will surly be ahead. The employment report will come out before the open tomorrow and will set the tone for trading, at least early. Jerry