The market put in another rally session today, at least on a price basis. The major averages gapped higher at the open and spent most of the rest of the session going sideways. The gains were again pretty evenly divided with the COMPQ and the NDX gaining 1.35% and 1.52% respectively. The SPX rallied 1.21%. All the major averages finished in about the middle of their intraday trading ranges. Volume was again the problem. It was lower across the board. Off by 9.04% on the New York and 4.27% on the Nasd. Leading stocks rallied as well with the leaders index higher by 1.21% It closed in about the middle of its trading range and volume was higher but still slightly below average. The index made a new high on both a closing and an intraday basis. The rally attempt continued today as the major averages had nice price moves. The problem remains volume. It was lower again today, showing that large institutional players were again not heavy buyers of stocks. We are now seeing three positive days of price action in the major averages with successively lower volume. The charts of the major averages are starting to take on a wedging look, which is negative. About the only real positive I can see right now is that the leading stocks are acting better than the overall market. The market must rally on strong volume or it will likely go lower. The 50dma’s of the major averages are the real obstacle now. They must overcome this resistance on strong volume or they will roll over and officially wipe out the follow through of last Tuesday. Jerry
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