Leaders Index 6-13

The market opened strong today and rallied through out the session. The major averages, due to late strength finished at the highs of the day with the NYA leading the way with a 1.54% gain and the COMPQ up 1.32%. They are all back above their 50dma’s. Volume was mixed, lower on the Nasd and higher on the New York. This produced a sixth day FTD on the SPY and IBD went back to market rally. Leading stocks outperformed the overall market with the leaders index rising 2.29% on lower and below average volume. The index regained what it lost yesterday, but was not able to break above it’s important 17dma. It is unusual to get an FTD so quickly after the market went into correction. It would have been better if both exchanges had shown higher volume and a lot of distribution got wiped away. The FTD was not well confirmed by the big three indicators we use to confirm follow through days. The % E’s were 15.8% today, which is within the proper range, but neither the weekly Coppock or the Eureka confirmed(although the Eureka could still issue a confirmation in the next few days). The failure rate of FTD’s with poor confirmation is high, but unless we get distribution in the next couple of days I guess you could tread lightly on the long side. This is a very confusing market and it probably doesn’t pay to get to aggressive in either direction. Jerry