Jerry Samet
06-06-2019, 07:23 PM
The market rallied again today for the third session in a row. The major averages opened moderately higher and after a brief sell off rallied for most of the rest of the session. A little late selling saw them close off their highs, but still high in their intraday trading ranges. The COMPQ and the NDX were higher by .53% and .76% respectively. The SPX gained .61%. Volume was lower again across the board, not what you want to see on a rally day. Leading stocks were higher as well with the leaders index rallying .50% on the day. The index closed near the top of its trading range. Volume was lower and well below average. The market was higher early but really got going on news reports that the tariffs on Mexico might be delayed. A little late selling saw prices finish below their highs, but the gains were still solid. After the close Pence said tariffs would go on as scheduled so there may be some weakness tomorrow. I hate to sound like a broken record, but the problem again was volume. It was lower across the board and there have now been three rally days off the lows all on successively lower volume. Large institutional players are not jumping back into the market after the recent decline. This is negative. It takes the firepower of these large players to propel a sustained advance. The charts of the major averages and the leaders index are taking on a wedging look. This can change with a couple of days of higher volume, but for now this stands out as a big potential red flag. The major averages and the leaders index now must regain their 50dma’s, hopefully on strong volume. This resistance level could cap this rally attempt if this doesn’t happen. Jerry