Leaders Index 7-2-18

The market staged a positive reversal today. The major averages opened weak and showed some real losses early. After not going anywhere for a while some buying came in and they rallied into the close. The Nasd averages were the strongest all day with the COMPQ and the NDX gaining .76% and .81% respectively. The SPX was higher by .31% All the major averages finished at their intraday trading highs, a good sign. The real issue today was volume. It was lower and below average across the board. This is not what you want to see on a positive reversal day. Leading stocks did well also with the leaders index gaining .86% on the day. The index also closed near the top of its trading range and right at the 17dma. The volume on the index was much lower than Friday and the lowest in several weeks. This is again not what you want to see on a reversal day. The market acted well today. It looked like there was going to be another sell off, but the market got a head of steam with around two and a half hours left and buying caused a rally. This type of reversal can lead to a short term move in the same direction so it would not be surprising to see the market rally for a couple of days. The problem was the volume. Without some conviction behind it there is little chance that this reversal today will turn into anything meaningful. Jerry