After a big decline on Monday the market staged a powerful rally today. The major averages opened higher and rallied for the rest of the day. The strength continued into the close and all the major averages finished at their intraday trading highs. The Nasd averages led the way with the COMPQ and the NDX higher by 5.84% and 6.16% respectively. The SPX rallied by a strong 4.96%. Volume was higher and a little above average. Higher volume was to be expected after a half session. Leading stocks were much higher as well with the leaders index gaining 6.83% on the day. The index closed near the top of its trading range and looks like it is bouncing off its 200dma. It is still well below its 50dma. Volume was higher but well below average. Today’s strong action reinforces the bear case. Historically the biggest up days in the major averages come during bear markets. Today in unlikely to be an exception. It is easy to get excited by such a strong rally and it does represent a rally day, but it is usually a costly mistake. I don’t think this bear market is over and we will likely see lower prices ahead. Jerry
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