Jerry Samet
08-08-2016, 06:44 PM
The market traded in a tight range today and all the major averages closed little changed on the session. The COMPQ was lower by .15% while the SPX lost .09%. Both closed low in their intraday trading ranges. Volume was lower across the board and below average on both exchanges. Leading stocks were lower on the day and were much weaker than the overall market. The leaders index declined .74% on lower volume than Friday. The index closed just below the midpoint of it’s trading range. A lot of the weakness today was caused by a large 7.97% decline in AHS, but there were several other components of the index that had significant losses. This continues the recent pattern of leading stocks lagging the overall market. The major averages are looking like they are on solid ground as today’s action was positive after a good rally on Friday. The leaders index is becoming a matter of concern. It has been unable to get back above the short term 9dma and 17dma. In addition the relative strength line of the index is looking a bit sickly. It has been in a decline for two weeks and is approaching it’s 50dma. A break below this moving average would be very negative. Overall the rally is still intact and the major averages are acting well. The inability of the leaders index to clear important resistance is cause for some concern. You would like to see quality growth stocks outperform. I would feel better about things if the leaders index could rally with some conviction over the current resistance area and join the major averages in new high ground. Jerry