Leaders Index 11-10-16

We had a kind of a split market. There was a real divergence between the New York and the Nasd averages. There seems to be a rotation underway with money leaving the tech sector and going into financials, infrastructure and building related stocks. This favors the New York averages. The Dow led the way with a gain of 1.17% while the SPX was higher by .20%. The COMPQ on the other hand fell .80% and the NDX declined 1.62%. The greatest strength was in the small caps as the RUT rallied 1.58% and the most weakness was in the semiconductors, as the SOX lost 2.12%. The New York averages closed in the upper half of their intraday trading ranges while the Nasd averages finished low in their intraday ranges. Volume was higher across the board and well above averages. This was enough to produce a distribution day on the Nasd averages. A distribution day right after the follow through like day we had yesterday is negative. Leading stocks today lagged the overall market, mostly due to the weakness in tech stocks. The leaders index was lower on the session, showing a decline of .72% and finishing in the lower half of its trading range. Volume was huge. There were three stocks in the index that had large losses, ELLI, NTES and AVGO. A couple, ABCB and EXP, had large gains. The chart of the index is still ok and the relative strength line is strong. There are a lot of cross currents right now. On the positive side the market internals like new highs and accumulation in individual stocks look positive. There also have been some nice buyable stocks. In addition we are in a seasonally favorable timeframe. On the negative we had a distribution day right after a follow through like day that may or may not lead to a tradable rally. Another is a hint of bifurcation in the market. A friend posted an email today saying that large numbers of stocks in his data base are hitting profit taking and loss cutting levels at the same time. Also in the last two trading sessions we have come very close to triggering Hindenburg Omen signals, another sign of bifurcation. It is really tough to figure out where we go from here. I guess you just trade small and be careful. Jerry