The market staged a strong snap back rally today, at least on a price basis. After opening higher the major averages spent the rest of the session rallying. There was buying into the close and all the major averages finished at their intraday trading highs, a positive sign. The gains in the major averages were strong with the COMPQ and the NDX rallying 2.65% and 2.70% respectively. The SPX was higher by 2.14%. Volume was the problem. It was lower across the board, not what you what to see on a rally day. Leading stocks had a good day as well with the leaders index gaining 4.57% on the session and closing at the top of its trading range. Volume was lower but above average. After the recent decline you would expect some kind of snap back rally. Encouraging news came from two fronts. China made a positive statement on trade and then the Vice Chairman of the Fed gave a speech that was interpreted as very dovish. That, along with the short term oversold condition, sparked a rally. All the major averages regained their 200dma’s and the leaders index closed above its 9dma. The missing key was volume. It was lower by 2.74% on the New York and 9.80% on the Nasd. This is a big problem as it shows that large institutional players were not back in the market buying stocks heavily. The gains today didn’t make it to the usually required level, but all the biggest up days on the COMPQ came during bear markets. That usually requires a 4% gain. The price gains were nice, but if this attempt to rally is going to have any legs there must be strong volume to propel it higher. That could well come in during the next few days, but it was not there today. Jerry
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