Leaders Index 10-25-18

The market rallied today after yesterday’s decline. The major averages opened higher and mostly rallied throughout the session. All the major averages finished fairly high in their intraday trading ranges, a good development. The Nasd averages were the strongest with the COMPQ and the NDX gaining 2.95% and 3.35% respectively. The SPX was higher by 1.86%. Volume was a problem. It was lower across the board, showing that there was less buying pressure today than there was selling pressure yesterday. Leading stocks rallied as well, but the gains were generally more muted. The leaders index rallied .92% on the day, but set new intraday lows early on. The index closed high in its trading range and volume was higher than yesterday. After a big decline you want to see the quality of the bounce. Today’s bounce had some good features to it, but overall it was a little weak. Much of the price losses were regained, but the lower volume put into question whether this is just a small bounce or the start of something tradable. Overall what we saw today was a little disappointing. It was led by good gains in tech stocks, mainly big cap tech stocks. This may be reversed to a degree tomorrow as AMZN and GOOGL reported earnings after the close. The market seems to be reacting badly to the numbers as both stocks are trading lower in the aftermarket as of this writing. This will likely lead to selling at the open tomorrow and we will have to see the market can recover and close strong. Right now today’s action was nice to see but didn’t do a lot to change the negative picture. The charts of the major averages and the leaders index still look terrible. The next step for all of them is to break above their 200dma resistance levels with conviction. If they can do that it would be encouraging. Jerry