Jerry Samet
08-03-2013, 10:54 AM
The market started off weak yesterday as the employment report was below expectations. The major averages bottomed in about the first hour and spent the rest of the day rallying. Late buy programs sent the market to it’s highs of the day at the close. Volume was lower across the board, which is not unusual on a Friday in the summer. This action constitutes a positive reversal and is good news for the rally. Leading stocks had a good session as well as the leaders index rose 1.36%, also on lower and below average volume. The index moved up to new highs and above the top of it’s recent consolidation. There continues to be a lot of buyable gap up moves on stocks that report good earnings, although many of these moves stall out after the gap. Few stocks are going on to produce twenty to thirty percent moves. The market clearly doesn’t want to sell off and markets that won’t sell off usually go higher. There are some red flags out there, such as the high number of distribution days, but you don’t argue with a rising market. You ride the rally while it is going up, but keep a close eye on the exits if things go south. The rally is still going strong, so the long side is the place to be. I will be away early next week, the updates will resume on Wednesday. Jerry