Jerry Samet
10-12-2013, 12:05 PM
The market continued it’s bounce yesterday as the major averages rallied between .80% on the COMPQ and .60% on the SPY. Volume was lower across the board for the second day, continuing Thursday’s pattern of higher prices on lower volume. Leading stocks rallied along with the overall market with the leaders index rising 1.86% on lower and below average volume. The index is now slightly above it’s important 17dma. The major averages have regained in the last two days all the losses from the government shut down, leading stocks got hit much harder and while they have staged a good rally on a price basis they have not recovered to the same extent that the major averages have. The recovery on Thursday and Friday on both the major averages and the leaders index has a bit of a wedging look to it. Two days in a row of solidly higher prices on lower volume. We need higher prices on strong volume for this recovery to be on more solid ground. We are in a difficult position now as the short term direction of the market is dependent on what is happening in Washington. If a deal is made the market may well continue higher, but if not the market will likely sell off as fast as it has risen in the last two days. You pay your money and you take your chances. Jerry