Leaders Index 2-1

The market had a solid rally Friday on a price basis as all the major averages rose in excess of 1% on an employment report that was generally weaker than expected, although revisions to prior months added more jobs. Volume was a disappointment as it declined across the board. You would like to see strong volume confirm a rally to new highs in a move, but we didn’t get it. Leading stocks rose a bit more than the overall market as the leaders index rallied 1.42% on higher and above average volume. The index closed right about on the 17dma but is still well below recent highs. The rally is got a toppy feel to it and is beginning to look a bit like the top of the market in 2007. The percent of NYSE stocks above the 200dma is 83%, a very high number and the Investors Intelligence number shows bullish advisors at 54.3%, a very high number that many times in the past has been associated with the top of rallies. It is a very difficult market where the major averages are rallying but the leaders are looking sloppy. I suspect we are very late in the rally, but there is no way to know how far it will finally go. Jerry