Leaders Index 8-13-14

The market had a good session today. After opening higher it stayed strong all day and all the major averages finished at their intraday highs.The COMPQ led the way with a gain of 1.02% while the SPY was higher by .67%. The COMPQ gained further ground above it’s 50dma and is now within one percent of it’s recent highs while the SPY got closer to this important moving average. Volume was higher across the board, showing that institutional players may be getting more interested in the market. Leading stocks again outperformed the overall market with the leaders index rising 1.47% on slightly lower volume. The index went into new high ground on both a price and a relative strength basis. It is positive when quality growth stocks lead the overall market. Even with the action of the index the number of stocks in attractive buying positions is not large. With today’s gains in the COMPQ on higher volume IBD called a follow through and said we are in a confirmed rally. If we look at the three indicators that confirm follow through days we find that the %E’s are at 11.3%, well within the proper range. The Eureka did not signal but still could in the next few days. The weekly Coppock is still on a buy signal from the first week in June. This means that as of now the follow through has some questions attached to it. 1.02% is a fairly low number to call a follow through from so while some buys are ok here, it is probably not a good idea to get to heavily invested to quickly. If the strength persists over the next couple of days I will look at a new leaders index as several members of the current index are pretty badly broken. I will be away for a few days, the updates will resume next week. Jerry