Jerry Samet
03-26-2020, 06:21 PM
The market staged a strong rally today. The Senate passed the rescue package on a 93 to 0 vote. In addition there were statements from the Fed about doing more. The major averages opened higher and rallied for most of the session. Late strength saw all the major averages finish at their intraday trading highs, a good sign. The gains were broad based with the COMPQ and the NDX gaining 5.58% and 5.72% respectively. The SPX rallied 6.24%. Volume was an issue. It was lower across the board, declining 14.54% on the Nasd and 6.48% on the New York. This shows that large institutional players were not heavy buyers of stocks today. Leading stocks were higher as well with the leaders index gaining 4.32% on the day. The index closed near the top of its trading range and is above its short term 9 and 17 day moving averages. Volume was lower but slightly above average. The rally attempt continued today as the market reacted with positive price action to news of the rescue package and Fed action. The lack of volume was a problem. It shows that large institutional players are not really buying into this up move. Without institutional support the chances of this turning into anything meaningful is small. The charts of the major averages look similar. The next real logical resistance, other than a couple of small gaps is the 200dma. The leaders index is closer to its 200dma and we will have to see if it can overcome this resistance. The index has had three rally days on successively lighter volume. This is a potential wedging pattern that must be watched. Right now we are waiting to see how far this rally attempt will go and if there will be a follow through. Jerry