The market tried to rally back after Friday’s sell off. Overall it was a fairly weak bounce. The major averages opened higher and were in positive territory all day, except for the COMPQ being slightly negative a couple of times during the session. The SPX gained .39% on the day while the COMPQ was higher by .31%. All the major averages closed near their intraday highs, which is positive, but volume was lower across the board. After a sell off you want to see a high quality bounce to build confidence. Today fell short. Leading stocks rallied as well with the leaders index up by .65%. The index tagged the important 17dma and bounced off it. It closed in the upper half of it’s intraday range but could not finish above the 9dma. Volume was also lower than Friday’s decline so there was little conviction in leading stocks either. It is important for the market to rally back quickly and with volume to increase confidence. If it can’t and the rally stalls it may lead to lower prices. Jerry
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