Leaders Index 11-14-14

The market had another pretty flat session again yesterday. The major averages traded in a fairly tight range and closed little changes. The Nasd averages were the strongest with the COMPQ rising .18% while the SPY was up by .02%. The real strength was in the NDX and the SOX, which saw gains of .27% and .90% respectively. The Nasd averages closed at their intraday highs while the New York averages finished below their absolute highs but in the upper half of their intraday trading ranges. Volume was lower across the board, showing that large institutional players were not particularly active. Leading stocks were also pretty flat on the day with the leaders index lower by .24%. The index closed in the upper half of it’s intraday range, but the relative strength line was lower. The rally seems to have lost a lot of steam in the last week and a half. Quality growth stocks have, with a few exceptions, have made little progress in this time period. The leaders index has flattened out and the major averages are struggling to make any small progress. The A’s minus E’s turned down yesterday. This is a very sensitive early warning sign. If it continues for the next few days it will spell real trouble for the rally. It is looking more and more like strength in the major averages is masking increasing weakness under the surface. These narrowing rallies are typical of the late stages of aging bull markets. If we can’t get real strength in both the major averages and leading stocks soon a more defensive posture will likely be warranted. Jerry