We have been looking for a bounce after the recent decline and we got one that started last Friday. There was a reversal day that led to four up days last week. Volume on the bounce was light which showed a lack of conviction, although it was a holiday week. There were five up days in a row all on progressively lower volume. This gave the rally attempt a wedging look which is not a positive sign. Leading stocks produced the same pattern as the major averages with five up days in a row on decling volume each day. IDB called an FTD on Friday based on extrapolating the hourly volume out to a full day. I think that calling an FTD based on this volume pattern is a bit creative, but we will have to see. If this is an FTD is was confirmed by two of the big three indicators. The Eureka signaled on Wednesday of last week and the %E’s are in the proper range. The weekly Coppock is still headed down and seems unlikely to confirm. The COMPQ is coming up on it’s 200 dma and the New York averages are approaching their 50dma’s. How the major averages react at these important moving averages and now resistance levels will tell us a lot about weather this is just an oversold bounce or a rally that has legs. Jerry
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