The market staged a positive reversal today. The major averages opened with sizable losses but quickly found a bottom and rallied into the close. All the major averages closed near their intraday trading highs as buying continued into the close. The Nasd averages led the way as tech stocks rebounded. The COMPQ and the NDX gained 1.75% and 1.68% respectively. The SPX was higher by .16%. Volume was higher across the board. The comparison was easy due to a preholiday light session, but it is still positive that volume was higher. A lot of tech and growth stocks that have been poor performers in recent months did well. The leaders index declined 3.92% on the day. This was due to the unusually heavy number of energy stocks in the index. These were the leaders when it was put together and they are getting hit hard recently. The index closed high in its trading range on higher volume. The market staged a positive reversal today. There is a bit of a tug of war going on right now. The strong recent declines in Treasury yields and the weakness in commodity prices point to a recession. On the other hand the Fed may cut back on rate increases if the economy weakens a lot. In recent days tech and growth stocks in general have done better as the energy and shipping groups that had been the leaders sell off. This may just be a reaction to lower bond yields and could be short lived. The day’s action was encouraging short term, but it doesn’t change the overall picture. The major averages may rally up to their 50dma’s, but that would be significant resistance. The primary direction of the market is still down. Jerry
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