Leaders Index 12-4-15

The market had a strong rally session yesterday, effectively reversing the large selloff on Thursday. The major averages opened higher and rose steadily the rest of the day. All the major averages closed at their intraday highs, a sign of strength, and had gains greater than Thursday’s decline. The COMPQ was up by 2.08% while the SPX gained 2.05%. The SPX also regained it’s important 50dma. The only problem with the day’s action was volume. It was lower across the board, while being above average on the New York and a bit below average on the Nasd. The fact that it was a Friday may have had something to do with the lower volume, but it was lower none the less. Leading stocks had a good day as well with the leaders index gaining 2.04%, about in line with the major averages. The index again bounced off it’s 50dma and regained it’s important 17dma. It closed near the top of it’s intraday trading range, although volume was lower than Thursday and below average. You would like to see a strong rebound like Friday’s on higher volume, which would show that large institutional players were heavy buyers. The pattern of declines on higher volume and rebounds on lighter volume continued this last week. That and the high number of distribution days are reason for some caution, but there are positions out there to play. This is the time for singles, not home runs, but there are singles out there. Jerry