Leaders Index 6-23-16

The market had a strong rally today. News that the bookies in England were saying the stay side was going to win started a rally in Europe that spread to the U S markets. The major averages opened with solid gains and rallied through the rest of the day. A late rally in the last half hour of trading saw all the major averages close at their intraday highs. The COMPQ led the way with a gain of 1.59% while the SPX rallied 1.34%. The greatest strength was in the semiconductor, small cap and mid cap stocks. The SOX was up by 2.64% and the others by 2.02% and 1.76% respectively. Volume was higher than yesterday. It was still below average but still enough to show some real buying, a good sign. The COMPQ regained it’s 50dma and so now all the major averages are above important moving averages. Leading stocks were higher as well with the leaders index gaining 1.40% on the session. The index closed high in it’s intraday trading range and cleared it’s short term 9dma. The index is sitting just above it’s important 17dma and it would be a very good sign if it could clearly break above this level. Volume was lower today and well below average, so there was not a lot of buying pressure today. If you look at the chart of the leaders index you will see that the index seems to be building a cup pattern. If this works out and the index breaks to new highs it will be a very positive signal. The market seemed to be pricing in a remain vote today. Most of that is likely already priced into the market now. If the vote is to remain there may be a sell on the news reaction, but a leave vote is not priced into the market. If this were to happen there would probably be a good sized decline. Jerry