Leaders Index 10-24-16

The market had a solid up session today, at least on a price basis. The major averages opened higher and were in the green all day. The greatest strength was in the Nasd averages. The COMPQ was higher by 1.00% while the NDX rallied 1.20%. Both finished at the top of their intraday trading ranges and the NDX made it into new high ground on both a closing and an intraday basis. The biggest move was in the semiconductors as the SOX rallied 1.87%. The New York averages closed in about the middle of their trading ranges and remain below their important 50dma’s. Volume was lower across the board and below average. This is not what you want to see on a day when the market is rallying. Leading stocks had a strong session as well. The current leaders index is almost four months old, which is long for an index. I said that I was going to remove a few broken stocks from the index and replace them. Over the weekend I removed STS,AHS,ANIK,FIVE, And BECN. I added PYPL,FB,GOOGL,DPZ,BABA. The updated index is showing more solid action. It has been in a consolidation for the last few weeks as the major averages struggled. The index has held the 50dma and the last two days has seen an impressive high volume bounce. There was a new high on an intraday basis but not on a closing basis. The relative strength line of the index set a new high, a good sign. The market still can’t seem to decide where it is going to go. Today’s action was positive and money seems to be going into the big cap liquid tech names. Much of this is likely newly printed money, so I hope the ink has had time to dry. There were a few stocks today showing very positive action like PAYC,MOMO and NVDA. Keep an eye on these stocks as an indicator of future direction. It is tough to figure out what is going to happen so a fairly defensive posture is probably a good idea. Jerry