Leaders Index 9-18-19

If you weren’t watching you would likely think it was a quiet session. There were slightly lower prices until the Fed announcement and news conference. After the Fed pretty much gave the market what it expected with a 25 basis point cut, there was some indication that there might not be as many cuts into the end of the year as was expected. There was a selloff and the major averages fell to some real losses. Buying support came in and the market recovered virtually all the losses and the major averages finished close to unchanged. The SPX was higher by .03% while the COMPQ and the NDX declined .11% and .01% respectively. All the major averages closed at or very near the top of their intraday trading ranges, a good sign. Volume was mixed. It was lower by 7.36% on the New York and higher by 7.30% on the Nasd. Leading stocks had a nice turnaround also but didn’t get back into positive territory. The index closed down by 1.10% on much higher and well above average volume. Much of the volume spike was caused by large increases in two components of the index, STE and ROKU. The index closed high in its trading range and closed above its short term 9dma. The relative strength line of the leaders index tagged its 50dma resistance level and was turned back, at least for now. We got a pretty crazy reaction to the Fed announcement but the two moves pretty much cancelled each other out. The Fed seemed to say it was less likely to cut rates as many times this year as the market thought. This caused a sell off, but the market recovered. This is a very tough market, but the lines in the sand are fairly clear. For the major averages, if they break to new high ground it would signal that the rally will continue. If they fall and break below their critical 50dma support levels then we could see a correction of some consequence. For the leaders index the next hurdle is getting above its 17dma. The downside is the 50dma, which it has been dancing with for over a week. Jerry