Leaders Index 5-27-16

The market had another solid session yesterday. After opening higher the major averages rallied until Yellen spoke and confirmed that higher interest rates were likely, even if not next month then soon. There was a quick decline after her talk, but the market quickly recovered and went on to recover the losses and move higher. All the major averages closed at or very near their intraday trading highs, a good sign. The COMPQ finished with a gain of .65% and the SPX rallied .43%. Volume was mixed. It was lower on the Nasd according to all sources. On the New York it it was higher according to esignal, Marketsmith and the WSJ. The big picture in IBD had it lower, showing that the volume issues at O’Neil’s shop concerning the major averages continue. Leading stocks advanced as well with the leaders index gaining .56% on lower and well below average volume. The index made a new high on a price basis yesterday, although the relative strength line just missed a new high. The fact that the market could recover and advance in the face of news that would usually be considered negative is encouraging. This time of year volume is usually light, but if you look at the chart of the COMPQ it shows higher prices for the last few days on successively lower volume. The index is starting to take on a wedging look. A day with a solid price advance on higher volume would be a big help. The market is acting better and there are some stocks that are behaving like they want to to go higher, but the number of such stocks is still small. The major averages are close to their recent highs on 4/20. So far only the mid cap index has gone above the recent high. If the rest of the major averages can also do this it will improve the picture. Jerry