Jerry Samet
08-09-2014, 11:43 AM
The market rallied strongly on a price basis yesterday with the major averages opening higher and rising through out the day. Late strength allowed all the major averages to close at their intraday highs. The New York averages were the strongest with the SPY rising 1.15% while the COMPQ was up .83%. All the major averages remain below important intermediate term moving averages. The COMPQ rose right up to it’s 50dma while the New York averages remain well below this critical moving averages. The problem remains volume. It was lower across the board and below average on both exchanges. This continues the pattern of strong volume on down days and low volume on rally days. Big institutional players are not supporting the market. This is a big negative. Leading stocks mirrored the over all market. The leaders index rose 1.49% and closed at the highs of the day. The index closed a bit above the down trending 9dma, which is good. The real test will be the 50dma. The index finished just below this intermediate term moving average. It must break above this level to improve the current picture. The real problem with Friday’s action in the leaders index was volume. It was much lower than Thursday and the lowest in weeks. We have seen many times in the last year or two when the markets looked like they were going to have a real correction and then turned around and rallied to new highs. This may well happen again, but right now the picture is not bright. Jerry