The market had a bounce back from yesterday’s sell off and regained part of what was lost. The major averages worked their way higher the entire session and some late strength saw them all close at their intraday trading highs. The COMPQ led the way with a gain of .43% while the SPX rallied .31%. Volume was lower across the board and below average on both major exchanges. This is not what you want to see on a bounce after a good sized decline. Leading stocks were higher as well with the leaders index rising .25% on higher and slightly above average volume. The index closed high in it’s trading range and that along with the volume is a positive sign. The problem now is the 17dma. The index remained below this important moving average and it is the primary resistance for the index. I think we must see two things to give us confidence that the rally is going to continue. The leaders index must regain the 17dma with some conviction and the major averages must continue to hold their short term moving averages and move into new high ground with volume. The quality of the bounce after a decline tells you a lot about weather or not it can continue. Today’s bounce was not that impressive. Jerry
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