The market finally staged an oversold rally after multiple days of downside action. The major averages opened higher and rallied most of the rest of the session. All the major averages finished near their intraday trading highs. The Nasd averages led the way with the COMPQ and the NDX gaining 2.14% and 2.07% respectively. The SPX rallied 1.83%. Volume was lower across the board. It fell 6.01% on the Nasd and 6.05% on the New York. Leading stocks had a good session as well with the leaders index gaining 1.95% on the day. The index closed near its high for the day on lower and about average volume. After over a week of straight selling the market finally staged an oversold bounce. The price gains were good, but volume was lower on both exchanges. This shows that large institutional players were not buying heavily today. It is negative when prices fall on higher volume and then rise on lower volume. A bounce after the recent decline would be expected and the price action was strong, but it is hard to get excited when volume does not confirm. It would not be unexpected to see the market rally back into its declining 50dma, which is the major resistance right now. We should not have to wait long as the SPX is only 1% below its 50dma while the COMPQ is 2% below this important moving average. I will be away for a few days, the updates will resume on next Tuesday. Jerry
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