Jerry Samet
07-12-2017, 07:15 PM
The market staged a strong rally today. The major averages gapped open this morning after Yellen’s remarks to Congress were released before the open. They then spent the rest of the session working their way higher and all closed at or very near their intraday trading highs, a sign of support. Volume was higher across the board, according to Esignal, but the increases were small. The Nasd and tech stocks in general were leaders with the COMPQ and the NDX were higher by 1.10% and 1.21% respectively while the SOX was strongest with a gain of 1.62%. The New York averages brought up the rear with the SPX higher by .73%, still not bad. Leading stocks had another positive session with the tech stocks looking like they are starting to reassert leadership. The DOW made a new high today, although the other major averages didn’t, so I decided to create a new leaders index. It consists of 21 stocks in 16 different industry groups. I have included a text file with the components of the index and a chart of the old index for comparison. The index gained 3.13% on much higher and above average volume. The index also closed high in its trading range and has a very good looking chart. Today’s action was what we have been waiting for. The strong price move on higher volume makes it look like the market wants to move higher. With leadership starting to emerge the chances of a move higher increase. I have to admit that finding enough stocks to fill out a proper leaders index was harder than usual, which is not encouraging, but much of that may be due to the fact that many tech stocks have not yet recovered to new highs. IBD did not call a new FTD, probably because the volume was not high enough and the major averages didn’t make new highs. A volatility adjusted FTD on the market school model does appear to have happened. Either way it was a positive session and it improved the picture quite a bit. Jerry