Leaders Index 1-12-16

The market tried to begin to stage the snap back rally we have been expecting today, but it was less than convincing. The major averages opened strong, but then like the last couple of days it peaked in the first half hour and started to sell off. They fell for most of the rest of the day and were on the verge of producing significant losses before late buying caused a rally into the close. The COMPQ led the way with a gain of 1.03% while the SPX rallied .78%. Both finished in the upper half of their intraday trading ranges, a sign of some support. Volume was mixed, lower on the Nasd and higher on the New York. Leading stocks rallied as well with the leaders index gaining 1.40% on the session and closing high in it’s intraday trading range. The index tagged it’s 50dma at the highs but was unable to get above this important moving average. Volume on the index was lower than yesterday and the declines of the last few days. It was above average, but the lower level shows that the buying pressure today was less than the selling pressure of the last few days. Overall a rally is to be expected after the strong sell off since the beginning of the year, but today’s action was less than impressive. The market internals were about flat today, not what you would expect on a day when the major averages showed solid gains. We will have to see how far this rally attempt goes, but I continue to view it as a better shorting opportunity than a time to go long. Jerry