Leaders Index 10-3-22

The market staged a strong relief rally today. A manufacturing report came in weaker than expected and the market rallied at the open and was higher most of the day. A little late selling came in but all the major averages finished near their intraday trading highs. The price gains were strong with the COMPQ and the NDX gaining 2.27% and 2.36% respectively. The SPX rallied 2.58%. Volume was mixed. It gained .92% on the Nasd and declined 1.75% on the New York. Leading stocks participated in the rally with the leaders index gaining 2.28% and closing in the upper half of its trading range. Volume was lower and below average. The market finally had a snap back rally after its recent decline. This is to be expected as the short term condition was very oversold. The spark seemed to be a report that manufacturing was weaker than expected in the most recent month. That set off hopes that the Fed would not raise rates as much. I don’t think that will happen. The reaction shows that many market participants are still waiting for a Fed pivot to save the market. It shows that many have not given up, which is what you see at major bottoms. This suggests that while there may be a short rally here the final bottom is not in. It looks like this could develop into a short term rally. I haven’t seen the figures for today but it looks like there could be a Eureka signal today. Also the A’s minus E’s turned up today and the Summation Index is close. There could be a short term rally here, but it would most likely be an opportunity to put on some short positions. There will be no updates tomorrow and Wednesday due to the Yom Kippur holiday. Jerry