The market staged a nice positive reversal today. The major averages sold off at the open after MSFT delivered a poorly received earnings report. The major averages opened lower but quickly found a bottom. They rallied from there mostly into the close and recovered almost all the early losses. All the major averages finished near their intraday trading highs. The close showed small declines with the COMPQ and the NDX falling .18% and .27% respectively. The SPX was off by only .02%. Volume was mixed. It gained 12.38% on the New York and fell 2.28% on the Nasd. Leading stocks did pretty well with the leaders index gaining .94% on lower and below average volume. The index made a new closing high and the relative strength line also made a new high. The action of the market today was encouraging. After a disappointing earnings report from MSFT you would expect a decline. We got that early but the market made a positive reversal and recovered substantially all the losses. This shows a lot of support. One of the biggest fears of bears is that earnings will disappoint in a weaker economy. MSFT is one of the most important companies out there and the market shrugged off the news of its report. This is positive action. There are a lot more earnings reports coming out and a Fed meeting next week, but today’s action looked good. Jerry
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