Leaders Index 5-12-25

The market had a strong rally today on news that there was a lot of progress on trade talks with China. The major averages opened with strong gains and mostly held on to them the rest of the day. Late buying saw all the major averages finish high in their intraday trading ranges. The COMPQ and the NDX gained 4.35% and 4.02% respectively. The SPX rallied 3.26%. Volume was considerably higher across the board. Leading stocks gained as well, but not as much as the overall market. The leaders index gained 1.11% on the day. The index closed high in its trading range on higher and about average volume. The news of a potential trade deal with China sent the market soaring. The major averages showed strong gains and closed strong. Volume was also higher, what you want to see on a big up day. There were also several attractive breakouts on the day. The major averages also gapped above their respective 200dma’s. The action of the market has been encouraging lately and it likely has further to go. But I still think this is a countertrend rally in a bear market and there will be another down leg before it is over. The NASD averages had over 4% moves today, and moves that large almost always occur in bear markets. This rally has all the ingredients of a tradable rally and will almost certainly go higher, at least in the short term. Jerry