Leaders Index 1-30-14

The roller coaster ride continued today as the market rebounded from yesterday’s losses. There was some good earnings news along with better sentiment on the emerging markets. It seems that we are now in the position where good news from some emerging market causes a rally while bad news causes a sell off. This is similar to the way it was with Europe. The COMPQ lead the way higher with a strong gain of 1.77% while the SPY gained 1.13%. All the major averages closed in the upper half of the intraday trading range. Volume was again the problem. It was lower across the board, continuing the recent pattern of higher volume declines followed by lower volume rallies. Leading stocks had a good day as well with the leaders index rising 1.44% on much higher and above average volume. At it’s intraday high the index tagged it’s 17dma but was turned back. The index is now trading between it’s 17dma which is resistance and it’s 50dma which is support. There was some weakness in the index as it closed below it’s open, showing that there was not a lot of conviction in the rally. We are back in a situation where we don’t know if a sell off will turn into something meaningful or turn right around and go on to new highs for the move. This makes it difficult to hold positions and if you are not a skilled short term trader the beach might be a better place to be until there is more clarity. There were two very nice breakouts today, FB and QIHU. How these stocks perform will be instructive as to the direction of the market. Jerry