The market had a strong day on a price basis yesterday. The employment report before the open was viewed as positive and all the major averages gapped higher at the open. Almost all the gains for the session came on this gap and the market spent the rest of the day holding those higher levels. The major averages finished at or near their intraday highs, so there was little if any profit taking late in the session. All the major averages are now back above their important 50dma’s, but they have been moving above and below this level for a while now. Despite the gains yesterday the major averages remain in their recent trading ranges. The real problem with yesterday’s action was volume. It was lower across the board. This shows that large institutional players were not heavy buyers and continues the pattern of high volume declines and lower volume rebounds. Leading stocks had a generally good session on Friday as the leaders index rose 2.45% on higher and above average volume. There was a mixed pattern on earnings reports, with DATA and CYBR rallying on strong numbers while MNST sold off on a disappointment. The index closed just below the midpoint of it’s intraday trading range and tagged the 17dma at it’s highs. The chart pattern is now ruled by the 50dma as support and the 17dma as resistance. The index could trade within this range for a while, but which way it breaks will tell us a lot about future direction. The trendless pattern continues. Every time it looks like the market is going to get going in one direction or the other it quickly reverses. This makes it very difficult to make worthwhile gains in either direction. Buying traditional breakouts in this environment usually produces losses. The only way to make even modest gains is to use early buy techniques and take gains earlier than normal. I would not let yesterday’s action get you to excited about the market. Jerry
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