Leaders Index 9-30-16

The market recovered almost all of Thursday’s losses yesterday after the almost panic over Deutsche Bank’s problems. Friday it was announced that the Justice Dept. was lowering the fine it wants them to pay and the stock and the market recovered. The major averages opened higher and rallied throughout the day. A little weakness in the last few minutes saw the major averages finish off their intraday trading highs, but the bulk of the gains remained intact. The COMPQ was higher by .81% while the SPX gained .80%. Both closed near the highs of their respective trading ranges, a sign of support. Volume was higher across the board and above average on both exchanges. This is positive as the market rallied on higher volume than it sold off on. Leading stocks were higher as well with the leaders index gaining .31% on higher and about average volume. The index closed in the upper half of it’s intraday trading, a positive development. The index also held above all it’s short term moving averages. The sell off on Thursday showed that the market is vulnerable to bad news. It sold off hard on the Deutsche Bank news and then rallied when it was not as bad as thought. The fact that the selloff came on lower volume than the rebound yesterday is an encouraging sign. The Nasd averages still remain just below their all time highs and above the consolidation range it just broke above. The New York averages are lagging right now. The SPX came back up to it’s 50dma while the other New York averages are below this important moving average. The rally remains intact, but it is not a really strong rally. Cautious optimism should be the rule right now. Jerry