The market got hit hard last week with all four trading days showing big losses and weak closes. The market continued that action early today as it sold off a lot and it looked like there would be another very negative session. About three hours into trading the market found a bottom and rallied into the close. The COMPQ and the NDX finished with gains of .63% and .49% respectively. The SPX closed higher by .28%. All the major averages closed at their intraday trading highs. Volume was higher across the board. It increased 20.53% on the Nasd and 34.30% on the New York. Leading stocks were higher as well with the leaders index gaining 1.69% on the day. The index closed near its high of the day and volume was much higher and well above average. The market has been showing unusual weakness with every day last week showing real declines. There are several reasons given for this but right now it seems the situation in Europe has the headlines. There is the real possibility of a shooting war in central Europe. There was weakness again early today but then a positive reversal took place and the market closed with modest gains. Volume was much higher than Friday. This is unusual as Friday was an expiration day. Overall the market still looks pretty weak. Today’s action was most likely an oversold bounce and I would say the direction of the market is still down. There may be a short term bottom in and the major averages and the leading stocks could rally into resistance. The major averages could rally into their 200dma’s while the leaders index could go and test its 50dma. There are several important companies reporting earnings later this week and the Fed announcement will come on Wednesday. We will have to see if this reversal has any legs. Jerry
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