Leaders Index 2-19-16

The market had a pretty flat session yesterday. After a little early weakness the major averages recovered and traded around unchanged the rest of the session. Final results were mixed with the COMPQ rising .38% while the SPX was about exactly flat. Volume was lower across the board, despite it being an expiration day, showing that large institutional players were not that active yesterday. Leading stocks were a little higher on the session with the leaders index rising .24% on volume that was about flat with Thursday’s volume and well below average. The index made new highs on both a closing price and a relative strength basis. The follow through that occurred on Wednesday is still intact. We now have two days after the follow through without distribution. Distribution within three days of a follow through is very negative and if we can avoid it again on Monday it will put the rally on more solid footing. This rally attempt is looking better than the most recent ones, but it is not a strong up move. The weekly Coppock has not signaled yet, although it could still confirm next week if a power full enough rally occurs to turn it up. The most negative thing about this rally attempt is the lack of attractive stocks. Despite the follow through there really isn’t much of anything you would want to buy. In a real rally that produces large gains there is almost always a large number of stocks to choose from. If you look at the Marketsmith 250 numbers yesterday the were 128 stocks down on high volume and only 42 up on heavy volume. The picture could always improve, but since there isn’t much to buy a good size cash position is still probably a good idea. Jerry