Leaders Index 3-13-20

The market opened stronger yesterday and then mostly bounced around with mild gains. The major averages took off in the last half hour on a very well received set of announcements by the President at a news conference. They regained most of Thursday’s losses and closed strong. All the major averages finished at or very near their intraday trading highs on a nice reversal. The COMPQ and the NDX gained 9.35% and 10.07% respectively while the SPX rallied 9.29%. Volume was the main issue. It was lower across the board, falling 8.79% on the Nasd and 8.51% on the New York. This is not what you want to see on a rebound. Leading stocks were strong as well with the leaders index higher by 9.00%. The index closed high in its trading range on lower but still above average volume. The market opened higher yesterday and did rally. After the open its didn’t seem to be able to make much progress and it just bounced around in what looked like it would be a weak rebound. The news conference was very well received and the market rallied hard in the last half hour. A big issue again was volume. It fell across the board and we see a continuation of the pattern of high volume declines followed by lower volume rebounds. This shows distribution by large institutional players. There have been several large percentage gain days since this bear market started, and I suspect yesterday will turn out to be another one. Experienced market operators know that this is bear market action. Yesterday’s action may have put in a short term bottom and we could see a little bit of upside action for a couple of days, but I don’t think we have seen the bottom of this bear market yet. Jerry