Leaders Index 11-16-17

The market staged a nice rally today. In anticipation of a positive vote in the House, which it got later in the day, the major averages opened higher and rallied most of the remainder of the session. The COMPQ ended the day higher by 1.30% while the SPX gained .82%. All the major averages closed near their intraday trading highs, showing that there was buying throughout the day. Volume was mixed. It was slightly higher on the Nasd but down a bit on the New York. It would have been preferable to see strong volume across the board on a big rally day. Leading stocks outperformed the overall market with the leaders index rallying 1.99%. The index has been in a consolidation pattern for the last seven trading days as it allowed its short term moving averages to catch up. Today’s action was a breakout from this consolidation as the index made new highs on both a closing and an intraday basis. It also closed high in its trading range, a good sign. The relative strength line of the index also set a new high. It is positive when quality growth stocks outperform the overall market. We have been in one of those periods when the market has consolidated after a move to new highs. The decline has been mild, as it has been many times before in the last year or more. Today’s action may signal that we are going into another rally period where the major averages and the leaders index move on to new highs. That has already happened in the COMPQ and the leaders index. The RUT and the NYA both moved back above their 50dma’s today. The price gains were impressive, but it would have been better to see strong volume accompany it. At this point it look like the market will rally again from here. The real unknown here remains Washington. The House passed the tax bill today so the ball in now in the Senate’s court. Other important bill have died there this year. If the tax bill doesn’t get through the Senate there could be a nasty decline, but if it looks good then we will likely see higher prices . Jerry