Leaders Index 10-1-13

The market had a good rally today as it opened higher and rose the rest of the session. The major averages rallied between .75% on the NYA and 1.23% on the COMPQ. A late rally let the market finish at it’s highs of the session and the COMPQ broke out of it’s recent consolidation and set multi year highs. The SPY bounced off it’s 50dma, which is positive. Volume was slightly lower across the board, but still above average. The lower volume robbed us of a badly needed accumulation day. Leading stocks had a strong day as the leaders index rose 2.87% on slightly lower but above average volume. It didn’t break above it’s recent consolidation but it is close. The RS line of the index moved into new high ground, showing that quality stocks are leading the overall market, which is what you want to see. Several top stocks went on to new highs today, including NFLX, YELP, and ACT. Today’s action is what is needed to get the rally back on track, although higher volume would have been better. The fact that leading stocks are pacing the market would point to higher prices, although the still high level of distribution is a concern. Cautiously bullish seems to be the proper position for now. Jerry