The market rallied back today after yesterday’s decline. The major averages opened higher and spent most of the rest of the session rallying. All the major averages finished at or very near their intraday trading highs, a positive sign. The Nasd averages were the strongest with the COMPQ and the NDX gaining 1.43% and 1.56% respectively. The SPX was higher by 1.01%. Volume was a disappointment, it was lower across the board. It declined by 7.29% on the New York and 15.73%. This shows that the buying pressure today was not strong. Leading stocks had a good session as well. The leaders index was higher by 2.22% on the day. The index closed near the top of its trading range and regained the important 17dma. Volume was lower than yesterday but still above average. The market rebounded from yesterday’s losses as fear receded a bit. The price gains were solid and were a good percentage of the decline yesterday. There was buying throughout the day as the strong close shows. The real concern today is volume. When there is a sell off the quality of the bounce is important in determining if the worst is over. We had solid price gains today, but the lower volume is cause for concern. We will have to watch the action in the next few days. If the market can rally back to the recent highs and surpass them with volume the rally would be on solid ground again and the recent decline would be a blip. If the market rallies higher on light volume and stumbles at the old highs it might be a selling opportunity. If there is further weakness right away then we will likely see lower prices pretty quickly. Jerry
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