Jerry Samet
08-04-2014, 11:33 PM
After selling off last week the market staged a snap back rally today. The major averages opened higher and held the gains all day. A little late weakness saw the major averages close off their intraday highs, but still with solid gains. The COMPQ and the SPY were both higher by .72% while the small caps were strongest with the RUT higher by .89%. The real problem with the rebound today was volume. It was considerably lower than Friday and well below average. This is not what you want to see on a rebound following a sell off. The COMPQ regained it’s 50dma but the SPY didn’t. Leading stocks also rebounded with the leaders index climbing .97% on lower but slightly above average volume. The index traded above it’s 50dma but couldn’t hold it and closed back below this important moving average. The 9dma crossed below the 17dma and both are pointed down. The fact that we are having declines on heavy volume and rebounds on light volume is not a positive pattern. Large players were not heavy participants in today’s action. The COMPQ must hold it’s retaken 50dma and the SPY must regain this level with conviction. Few stocks are breaking out right now, although YY made a good effort today. This will have to change is the rally is to resume. Jerry