After selling off last week, the market bounced today. After opening higher the major averages sold off a bit before rallying nicely. There was a littler late selling, but all the major averages finished high in their intraday trading ranges. Ther Nsasd averages led the way with the COMPQ and the NDX gaining 1.11% and 1.02% respectively. The SPX was higher by .87%. Volume was mixed, a bit higher on the New York and quite a bit lower on the Nasd. Leading stocks were higher as well with the leaders index gaining 1.83% on the day. The index closed high in its trading range on lower and below average volume. After selling off pretty hard last week the market clearly moved into a correction. A lot of important support was broken. After a sell off you want to see the quality of the bounce to help determine if the worst is over. Today’s bounce was ok, but certainly nothing to get excited about. The lack of real volume showed that large institutional players were not in there buying heavily. We could see a counter trend rally here and if that happens the 50dma’s of the major averages and the leaders index would be a likely target. This moving average would likely provide considerable resistance. I still believe we are in an intermediate term correction and we have not seen the bottom yet. This is the biggest week of earnings season with five or six important companies reporting that could move the market. Everyone will be on edge awaiting those reports. Jerry
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