Leaders Index 5-12-17

The market traded in a fairly quiet manor yesterday with a slight downward bias. The major averages opened lower and traded in negative territory most of the day. The Nasd averages were again the leaders as the COMPQ finished with a slight gain of .09% while the SPX declined .15%. All the major averages closed high in their intraday trading ranges, a sign of support. Volume was lower across the board, not unusual on a Friday near the summer. Leading stocks pulled back also on lower and below average volume. The index traded below its short term 9dma but closed above this support level. It finished in the upper half of its trading range. Friday’s action continued the recent pattern of trading. The Nasd averages are acting the best as a small number of big cap tech stocks continue to perform well. The New York averages are still struggling to break out of a recent tight consolidation pattern. If they can accomplish this it will brighten the picture quite a bit. The action of leading stocks is always a very good indicator of the direction of the market. Last week two stocks, NVDA and COHR had powerful buyable gap ups from consolidation patterns after strong earnings reports. This is the pattern that O’Neil used to love as they can, in a good market, produce real monster runs. Watch these two stocks, if they perform well the rally will likely move higher. If they roll over the overall market will probably follow. Jerry