Leaders Index 7-22-16

The market had another solid advance yesterday. The major averages opened modestly higher and rose pretty steadily for the rest of the session. A strong close saw all the major averages finish at their intraday trading highs, a sign of support from large institutional players. The COMPQ closed with a gain of .52% while the SPX rallied .46%. These are solid gains and pretty much wipe out the losses on Thursday. Volume was lower across the board, which is not unusual for a Friday in the summer. Leading stocks had a strong session as well with the leaders index gaining 2.13% on lower and below average volume. This represents a new high for the leaders index on both a price and a relative strength basis. The index also closed near it’s intraday high. It tagged it’s short term 9dma at the lows of the day but closed well above this short term support level. The market is acting well right now and quality growth stocks are outperforming the overall market. This usually leads to higher prices in at least the short term. The market clearly wants to go higher right now and participating in the advance is the thing to do. There are more quality growth stocks setting up proper buy points than we have seen in a long time, but we are still in the situation where few are producing large gains. This is an artificially driven market, as it has been since the beginning of the cyclical bull in March of 2009. Central banks are still in control and are still able to prevent the markets from having a real decline by printing money and having artificially low interest rates. They are winning now, but the time will come, I don’t know when, when they will lose control and there will be real declines in markets across the world. When that happens it will be ugly, but for now try to get some profits out of the current rally. Jerry