Leaders Index 4-10-18

The roller coaster continued today. Last night China made statements saying that they would lower tariffs and under take other measures to open their markets. The market reacted positively, and unlike yesterday it held the gains. The COMPQ rallied by 2.07% while the SPX gained 1.67%. The greatest strength was in the semiconductors with the SOX higher by 3.20%. All the major averages finished the session at or very near their intraday trading highs, a good sign. Volume was higher across the board. This along with the price gain was enough to produce a follow through on the major averages. Leading stocks had a good day as well. Since there was a new follow through I decided to create a new leaders index. It contains 21 stocks in 16 different industry groups, a good cross section of top performing stocks. I have included a text file with the components of the new index. It was higher by 1.71% on the session and made a new closing and intraday high. Volume was very strong and well above average. It is good to see strong volume as prices rise. There has been tremendous volatility recently and in situations like this you can get a follow through with less confidence than in more calm markets. There could be a news story tomorrow that causes the market to reverse today’s gains. It is however a real follow through and could lead to a tradable rally. Of the three indicators we use to confirm follow through days, it looks like two will confirm. The %E’s are in range and will confirm. I will have to wait until later tonight to run it but it looks like the Eureka will signal as well. The weekly Coppock is still in positive territory and will likely not confirm. This is better than the last follow through on 2/14 that was confirmed by only the %E’s, but it would be better if the weekly Coppock were to confirm as well. This is a legitimate signal today and it is likely ok to take some positions, but because of the news driven market some caution is warranted as well. Jerry