Leaders Index 11-9-16

The market always finds a way to surprise us. I said yesterday that if Trump won we would see at least a short term sell off. That looked to be true as last night after the outcome became apparent the futures were down as much as five percent. But by the time the markets opened this morning that loss had been almost erased. There was a little bouncing around early, then after about an hour and a half of trading the major averages began to rally and were strong the rest of the day. A little selling late saw the major averages finish a little off their intraday trading highs. The COMPQ finished with a gain of 1.11% and the SPX rallied by 1.11% also. The real strength was in the small and midcap stocks with the RUT and MID higher by 3.10% and 1.80% respectively. All the major averages closed near their intraday highs ,a sign of strength. Volume really completed the picture today as it was up a lot and well above average. IBD went back to a rally resumption and talked about a third day follow through, although they didn’t wipe the distribution clean. They likely consider it a rally resumption rather than a real new follow through. Leading stocks moved higher as well. Due to the strong action today I created a new leaders index as the previous one had too many broken stocks. It has 20 stocks in 15 different industry groups. As you can see it had a good session today, rising 2.84% on very high volume. I think these stocks are a good cross section and will provide a good warning of weakness in quality growth stocks going forward. The market overcame strong resistance today and did it with conviction. All the major averages cleared their 50dma’s on very heavy trade. This is a positive development. It’s hard to say how far this will go and if this up move will have legs, but the picture improved today. Jerry