Leaders Index 8-13-19

The current news driven market came into full focus today. There was a powerful rally at the open on news that the new tariffs on China would be delayed until after Christmas. The major averages posted strong gains in the first hour of trading and held on to them the rest of the session. All the major averages closed high in their intraday trading ranges, a good sign. The Nasd averages were the strongest with the COMPQ and the NDX rallying 1.95% and 2.20% respectively. The SPX gained 1.50%. Volume was higher across the board, by 14.48% on the Nasd and 29.25% on the New York. These are very strong volume levels and along with the price gains were enough to produce a sixth day follow through on the major averages. Leading stocks showed strong action as well. I usually put together a new leaders index when there is a new follow through but did not have a chance today. I will try to have it ready tomorrow. The current index was higher by 2.46% today. It closed high in its trading range and is back above all its short term moving averages. Volume was lower and below average. The market staged a strong rally today and produced a new follow through. The volume was much higher today and showed that large institutional players were buying stocks today. The COMPQ closed right on its important 50dma while the SPX remains below this moving average. They both must rally above this level. Since this was a follow through we look at the three confirming indicators to give us an idea how likely it is that this follow through will produce a tradable rally. The weekly Coppock is not in position to signal and will not confirm. There was no Eureka signal today, although we could still get one in the next few days and change the current non confirmation. The %E’s are 11.9%, well within the range to confirm. This follow through is this confirmed only by the %E’s. One out of three means that this is not a well confirmed follow through. This one was produced by a news story in a news driven market. If news comes out tomorrow that the tariffs are back on much or all of these gains will likely be reversed. It is a legitimate follow through and positions can be taken, but you have to remember that you are one tweet away from having your positions trashed. Jerry