Jerry Samet
10-10-2013, 11:38 PM
The market had a strong snap back rally today on news that there might be a short term deal to get the government open again and raise the debt limit a bit. The major averages had solid moves with the COMPQ leading the way with a 2.26% move, closely followed by the NYA with a gain of 2.07%. All the major averages are now back above their 50dma’s. The real problem was volume. It was lower across the board, showing a lack of real buying pressure. Leading stocks were strong also as the leaders index rose 3.42% on above average but much lower volume. The index also was not able to regain it’s important 17dma. IBD also went back to market under pressure because of the day’s action, but all the past distribution days came back into play, so there are six on all the major averages. The rally was caused by a Republican proposal for a six week extension of the debt limit that would open the government again. This proposal has not yet been accepted by Democrats, and even if it is I am skeptical that it would have a long lasting effect. The market is still on thin ice and caution should be exercised. Jerry