Leaders Index 12-2-14

The market recovered some of yesterday’s losses in today’s trading with the major averages opening stronger and holding those gains for the rest of the trading day. The COMPQ rose .60% while the SPY was higher by .64%. Both showed late strength and finished near their intraday highs. Volume was lower across the board, showing that there was not a lot of institutional buying today. There has been little or no damage done to the major averages as they remain at or near recent highs and above their short term moving averages. Leading stocks again underperformed the overall market with the leaders index rising .25% on very low volume. It is starting to look like the recent breakout above it’s recent consolidation was false. It is back in the consolidation and is sitting on it’s 17dma. The relative strength line of the index is also sitting on it’s 50dma. These moving averages must hold or the outlook will dim considerably. Marketsmith has a recently introduced feature that tells how many stocks in the Marketsmith 250 are higher or lower on volume. Even with today’s rise in the major averages there were 86 stocks up on volume and 156 stocks lower on volume. This shows there is continuing weakness under the surface. The was also another Hindenburg Omen signal today. Two signals close together produce a confirmed signal that are usually seen late in a bull market. It is impossible to tell how long a rally will continue and it certainly alright to carry long positions, but there are not many stocks producing strong gains so it is hard to make real progress in the current environment. Jerry