The market put in a very positive session today. The major averages opened strong and built on those gains early. There was some selling later in the session, but all the major averages closed in the upper half of their intraday trading ranges. There were solid gains all around with the COMPQ and the NDX higher by .97% and 1.02% respectively. The SPX rallied .89%. Volume was higher across the board. This is just what you want to see as prices rise. Leading stocks were higher as well with the leaders index gaining 1.24%, a bit better than the overall market. The index closed above its 50dma and closed in the upper half of its trading range, positive action. The best part of today’s results was the very strong volume. Yesterday I said that the major averages and the leaders index had to break above their 50dma resistance levels and do it on higher volume. They did that today. All the major averages are above their 50dma now support level and they did it on higher volume. The leaders index broke above its 50dma on volume that was the highest in several weeks. The relative strength line of the leaders index also broke above its 50dma. It would be positive for quality growth stocks to start outperforming the general market. There are still some negative factors out there. The weekly Coppock turned down last week on all the major averages. While the sell signal are less reliable than the buy signals, they should be watched closely. Right now the major averages are set up for a possible follow through. Starting on the fourth day of a rally attempt a strong up day on increasing volume would produce a follow through. Weather that happens or not, the next step for the market, if there is to be a rally from here, will be to make a run for the recent highs. Jerry
Reply With Quote