Leaders Index 10-16-14

It was another wild day. The market opened very weak and it looked like it was going to be another ugly session. The major averages bottomed in the first hour after a member of the Fed said that they might delay the end of QE. I said a few days ago that this might happen if the sell off really gathered steam. A rally started after that that took the major averages higher and they closed near their intraday highs. A little late weakness caused the market to close about unchanged on the day. The COMPQ was up by .05% while the SPY was higher by .01%. The major averages recovered early losses but it would have been better it they finished with solid gains. Volume was lower across the board but was still well above average. Leading stocks reversed early losses as well as the leaders index finished the day up by 2.81%. The index closed near it’s intraday high and volume, while lower than yesterday, was well above average. Yesterday’s action may have put in a short term bottom, as I previously said. The leaders index has two big white candles in the last two days on heavy volume. The A’s minus E’s turned up today, a good sign but I want to see at least a couple of more higher points before I get to excited about this. I would not be surprised to see the leaders index rally back to it’s 50dma and the major averages back to their 200dma’s. These important moving averages would provide real resistance and how trading goes at these levels will tell us a lot about weather this rally attempt will have legs. If I had to bet I would say a move into these moving averages would likely be a short opportunity rather than a long one. Time and trading will tell. Jerry