Leaders Index 2-3-20

As usual there was a lot of action when I was away. The market was hit hard on Friday due to increased concerns about the coronavirus. The market rebounded today, but it left a bit to be desired. The major averages opened higher and rallied to nice gains. They then spent the rest of the session holding on to much of the gains. The Nasd averages were the strongest with the COMPQ and the NDX gaining 1.34% and 1.50% respectively. The SPX was higher by .73%. The Nasd averages closed in the upper half of their trading ranges while the New York averages finished low in their trading ranges. Volume was lower across the board. It fell by 11.55% on the New York and 9.61% on the Nasd. Leading stocks were higher as well with the leaders index gaining 1.35% on the day. It closed in the upper half of its trading range on lower but slightly above average volume. The market is acting a bit worse as fears about the coronavirus increased. Friday produced significant losses on higher volume. This shows that large institutional players were selling stocks heavily. When you have a sell off the quality of the bounce can tell you a lot. Today’s bounce could only be described as ok. Volume was lower across the board, not what you want to see on a rebound from a sell off. Also the New York averages finished low in their trading ranges, showing a lack of support. The gains were also less than the declines on Friday. The market is acting more like it is struggling a bit and risk levels have increased. Any more bad news about the coronavirus could cause further declines. GOOGL reported after the close and the results were disappointing. The stock is selling off in the afterhours and could cause some early weakness tomorrow. We need to see the major averages and the leaders index rally back to their recent highs and above on volume for the rally to continue. If not there will likely be lower prices ahead. Jerry