Leaders Index 10-5-16

The market rebounded nicely today. The major averages started out strong and held the gains most of the day. Some late weakness cut those gains, but they were still solid. The COMPQ gained .50% while the SPX rallied .43%. Both finished in about the middle of their intraday trading ranges, a fairly neutral sign. Volume was higher across the board and was above average on the New York, a positive development after a couple of days of weakness. Leading stocks had a more mixed session. The leaders index declined .69% today and closed in the lower half of it’s trading range. The index closed below the short term 9dma but again held it’s 17dma. The relative strength line took a little hit but still looks ok. The index remains in a consolidation range it has been in for a couple of weeks. It has pulled back into that consolidation after trying to break out. Volume was lower today and well below average, which is what you want to see on a pullback. The major averages and the leading stocks diverged today. The major averages staged a rally after a couple of negative days while the leaders index, which has been holding up better, weakened. The two resistance areas I have been talking about for a few days are still there. The New York averages must clear their 50dma’s and the Nasd averages must break into new high ground. The current leaders index is now over three months old. There are about a half dozen stocks in the index that are badly broken. I will look for some replacements over the next few days and put out an update. Jerry