Leaders Index 2-26-16

The market opened with modest gains yesterday, but there was not much power in the move. The major averages saw their highs in the first half hour of trading and spent the rest of the session working their way lower. All the major averages closed at or very near their lows of the day, not a positive sign. The COMPQ was the only one of the major averages that managed to close in positive territory with a gain of .18%. The SPX, along with the other New York averages, finished in negative territory with a loss of .19%. Volume was higher across the board, showing that large institutional players were active yesterday. The SPX avoided a distribution day by the smallest of margins while the action of the COMPQ amounted to a stalling day and thus is distribution on this major average. Leading stocks were mixed to lower yesterday with the leaders index falling 1.03% and closing near it’s intraday trading low. Volume was lower than Thursday and well below average. The chart of the index is still looking solid as it is rising above all it’s short term moving averages. The rally attempt that began with the follow through on 2/17 continues, but it is still less than impressive. The weekly Coppock did not turn up last week so it is no longer in a position to confirm the recent follow through. This means that it was only confirmed by the Eureka, one of the three confirming indicators. There are a few stocks that are acting better and there were impressive buyable gap ups in STMP and DPZ. How these two stocks act will tell us a lot about the future direction of the market. If they act well it will be positive. If they quickly fail like the buyable gap ups in GOOGL and FB did it will be negative. The rally is still intact, but it is a struggling rally, not a strong one, and a good degree of caution is warranted. Jerry