Leaders Index 5-18-17

After a big selloff the quality of the bounce is critical. The market was higher almost the entire session, but the bounce was not that inspiring. The Nasd averages were the strongest with the COMPQ higher by .73% and the NDX up by .82%. They closed high in their intraday trading ranges, a good sign. Volume was lower on the Nasd. You would prefer to see higher volume on the bounce than the selloff. The New York averages recovered less of yesterday’s decline with the SPX higher by .37%. It finished in the upper half of its trading range, but just barely. Volume on the New York was very close to yesterday’s level and Esignal has it slightly higher. Leading stocks did better than the overall market after getting hit harder yesterday. The leaders index rallied 1.36% and closed high in its trading range. The index bounced off its 50dma and closed right at its important 17dma, which is now resistance. Volume was lower than yesterday but still pretty strong. The bounce today was ok but not as strong as you would like it to be. The Nasd averages continue to lead the New York averages. There are two really important hurdles for the market now. The New York averages must break above their 50dma lines and the leaders index has to overcome resistance at its 17dma. If this happens pretty quickly the rally could get back on track. If it doesn’t the market may well sell off further. Jerry