The market continued it’s snapback rally today with the major averages showing solid gains. There was a good run early then the major averages lost most of their gains only to see late strength take them back to their intraday highs. The COMPQ finished with a gain of 2.48% while the SPX climbed 2.43%. Volume was lower across the board, so there was not a lot of buying pressure from large institutional players. Leading stocks were higher also but not as much as the overall market. The leaders index was higher on the day by 1.87% and closed in the upper half of it’s intraday range. Volume was lower on the session and the index is taking on the look of a wedging rally. After a decline as large as we saw in the last week a rally is to be expected. The key in my mind now is the 200dma on the COMPQ. The index is now 2% below this moving average which is now resistance. If the index can break above this level with some conviction it might have a shot at returning to recent highs. If it can’t then we should see lower prices. Jerry
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