Leaders Index 9-2-16

The market had a solid up session yesterday. After the employment report came out weaker than expected the market’s expectation of a Fed rate increase in September declined considerably. The reaction of the market was to rally strongly at the open and then spent several hours pulling back. A late rally allowed all the major averages to close in the upper half of their intraday trading ranges. The COMPQ ended the day with a gain of .43% while the SPX rallied .42%. The real strength was in the small and mid cap stocks with the RUT and the MID rising .97% each. Both of there averages moved into new high ground. Volume was lower on the day, which was the only real negative. This is the only real negative in yesterday’s action, but the fact that it was the Friday before the Labor Day weekend is the reason. Leading stocks had a positive session as well with the leaders index rising .90% on the day and closing high in It’s intraday trading range. It is now well above all it’s short term moving averages. The index broke above it’s recent consolidation range and is now in new high ground on both a price and a relative strength basis. Volume was lower and below average, but that again was mostly due to the long holiday weekend. Yesterday’s action did a lot to improve the picture. The leaders index finally broke into new high ground. It is positive when quality growth stocks lead the market higher. The small and mid cap averages also posted new all time highs. The summer vacation season will be over after this weekend and all the major players will be back at work. We will have to see if Friday’s positive action carries over, but Friday’s action improved the outlook. Jerry