Leaders Index 11-30-17

The market staged a nice rally from the open. The major averages were in positive territory the entire session. There were nice gains early but the market really took off after Sen McCain said he would support the tax bill, increasing its chances for ultimate passage. The New York averages again led the way with the SPX higher by .82% and the Dow rallying 1.39%. The Nasd averages lagged as tech stocks were not that strong. The COMPQ was higher by .73% while the NDX gained .86%. The Nasd averages closed near their intraday trading highs while New York averages finished in the upper half. Volume was mixed. It was much higher on the New York while it was lower but still well above average on the Nasd. Leading stocks rallied as well, but underperformed the overall market. The leaders index was higher by .63% and closed in about the middle of its trading range. There was a red candle because the index closed below its opening price. Volume on the index was lower than yesterday, but was still very high. The index tried to break above its important 17dma now resistance level, but couldn’t. After a nasty sell off you want to look at the quality of the bounce to try and determine if the worst is over. We had a divergence on this count today. The New York averages staged a strong rally to new high ground on heavy volume and the charts look good. The Nasd averages lagged as they had much smaller gains than the losses yesterday and volume was lower. The bounce in the tech stocks was not particularly impressive, as long as that is the case the Nasd averages and growth oriented stocks will lag. It appears that leadership has shifted to financials and more value oriented stocks, along with small and mid-cap stocks. The fact that quality growth stocks that have led the rally for a long time are weakening is a cause for concern. It would improve the picture quite a bit if these stocks would join the New York stocks in new high ground. Jerry