Leaders Index 5-2-16

After last week’s sell off you would expect to see at least some kind of oversold bounce. We got a bounce today. The market opened a bit higher but gained strength as the session progressed. All the major averages finished the day at or very near their intraday highs. The price gains were solid with the COMPQ gaining .88% while the SPX rallied .78%. The gains were wide spread as the small and mid cap averages, along with the semiconductors showing similar gains. Volume was lower across the board, not what you want to see on a bounce back day. IBD says the volume on the Nasd was higher, but Esignal shows it clearly lower. Leading stocks rose along with the overall market and about in line with the overall market. The leaders index gained .77% and closed in about the middle of it’s intraday trading range. It rose back above it’s 50dma and is now back between the 50dma as support and the 9dma and 17dma as resistance. After a selloff the quality of the bounce is very important. You want to see a strong price advance confirmed by heavy volume. We didn’t get the volume today. The COMPQ got back above it’s 50dma today but is still below it’s 200dma. This is the next important resistance level. How it handles this resistance will tell us a lot about which way the market will go. Jerry