The market put in another rally today, at least on a price basis. After opening higher the major averages bounced around before closing with solid gains. The COMPQ was higher by .49% while the SPX rallied .69%. The closes were off their intraday trading highs, but were still in the upper half of their trading ranges. Volume was lower across the board, not what you want to see when prices are moving higher. Leading stocks were higher on the day with the leaders index gaining 1.08% on the day . The index closed in about the middle of its trading range. At its peak the leaders index tagged its declining 17dma but closed well below this resistance level. Volume was lower and well below average. The market moved higher after the reversal yesterday. These types of reversals can often lead to at least a short term change in trend. The market continues to rally on a price basis, but volume has not been there to back it up. The leaders index has rallied for the last three days and is now between its 17dma resistance level and its 9dma support level. The first to be broken will tell us a lot about which way prices will move going forward. The major averages have now put in three rally days in a row, but have done so on three successively lower days of volume. This is starting to look like a wedging pattern that fails more often than it succeeds. The major averages look like they are going to make a run for their 50 day moving averages. If they can overcome these resistance levels with conviction, meaning volume, they could continue to rally. If not prices would likely decline again. Jerry
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