After a big decline the quality of the bounce can tell you a lot. If there is a good strong bounce with volume the worst may be over. If however the bounce is weak then lower prices may well be ahead. The bounce today left much to be desired. The major averages regained only a small fraction of yesterday’s losses. The COMPQ rose .57% while the SPX rallied .27%. All the major averages closed low in their intraday trading ranges and volume was mixed, slightly lower on the Nasd and higher on the New York. This shows a lack of real buying conviction on the part of large institutional players. Leading stocks rebounded today as well, but they too showed little conviction. The leaders index rose 2.50% and closed in the upper half of it’s intraday range. Volume though was lacking. While it was above average it was lower than either of the two previous down days. The 50dma looks like it is providing support for the leaders index right now and the declining 9dma seems to be the first level of resistance. Which moving average is broken first will tell us a lot about which way quality growth stocks are headed. Right now, unfortunately, much of the action over the next few days will be dictated by what happens with Greece, and that is almost impossible to predict. The rest of the week and next Monday will be interesting. Jerry
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