Leaders Index 9-4-18

The market opened lower today and was in negative territory for pretty much the entire session. The overall results were positive as the market climbed back and closed with fairly small losses. The COMPQ was lower by .23% while the SPX declined .17%. All the major averages finished at or very near their intraday trading highs, a sign of support. Volume was lower across the board, which is to be expected since it is compared to a Friday before a three day weekend. This was enough however to produce a fresh distribution day on the Nasd averages. The decline in the SPX was too small to qualify as distribution. Leading stocks had a pretty good session with the leaders index gaining .27% on the day as there was positive action in many quality growth stocks. The index made a new high on both a closing and an intraday basis and it continues to rise above the short term 9dma. The relative strength line of the index also made a new high and volume was lower than Friday and slightly above average. Today’s action would have to be considered positive overall. The major averages, after a weak open, recovered most of their losses and finished near the top of their trading ranges, this is a sign of support as buying came in to boost prices. The distribution day in the Nasd averages looks pretty weak when viewed in this light. The fact that quality growth stocks continue to lead the market higher is also an encouraging sign. The market rarely tops out when leading stocks are acting well. A couple of the shorter term indicators I look at a flashing warning signs so it would not be unexpected to see the market display a little short term weakness, but the overall trend still appears to be up. Jerry