Leaders Index 11-8-13

The market rebounded from Thursday’s sell off as the major averages regained about two thirds of what it had lost the previous day. The major averages were higher the entire session and a late rally enabled them to close at session highs. The COMPQ lead the way with a 1.6% gain while the SPY rose 1.3%. Volume was lower across the board, so it was not an accumulation day. This is not the kind of action you want to see. A big volume sell off should be followed by a bigger volume rebound to be positive. Leading stocks also had good gains on a price basis as the leaders index rose 3.10%. Volume again was the issue. It was down quite a bit from Thursday’s level and was about average, in contrast to to the previous day’s above average levels. The index had an inside day as did the major averages. It closed a bit above it’s 50dma, but overall it was not an impressive rebound. After a decline it is important to look at the quality of the bounce. We will have to see some strong up days on higher volume to improve the picture. Right now the market looks like it is on pretty shaky ground. We have a high level of distribution and mostly broken leaders. A good degree of caution is warranted. Jerry