Leaders Index 9-25-20

The market put in a strong session yesterday, at least on a price basis. The major averages opened slightly lower and then went on to rally pretty much the rest of the day. All the major averages finished at or very near the top of their intraday trading ranges, a good sign. The greatest strength was in the Nasd averages as the big cap tech stocks were generally strong. The COMPQ and the NDX gained 2.26% and 2.34% respectively. The SPX was higher by 1.60%, all nice gains. Volume was the problem, it was lower across the board. It fell 8.56% on the Nasd and 20.08% on the New York. These large declines show that large institutional players were not buying stocks yesterday. Leading stocks were strong as well with the leaders index higher by 3.69% on the day. The index closed near the top of its trading range and volume was lower and below average. The market had a good rally day yesterday, but the volume was not there. The market continued its recent pattern of high volume declines and lower volume rallies. This is generally not an encouraging pattern as it shows general distribution. We are in pretty much the same situation, waiting for the proper action. The major averages remain below their important 50dma resistance levels. The leaders index is in a consolidation pattern below its old highs and the relative strength line is close to but below its old highs. If these two were to both break into new high ground on volume it would be very positive. Right now we are in a position where there could be a follow through on the COMPQ and the SPX would set up in a couple of days. If there would be a follow through soon it would be a little suspect. The weekly Coppock is not in a position to signal now and the %E’s are at 8.7%. This is within the proper range but near the bottom of the range. The Eureka can signal at any time. At its current rate of decline the weekly Coppock will be in a position to signal around the election. If the results are to the market’s liking there could be a well confirmed follow through then that could lead to another solid rally. Right now there is a lot of uncertainty. Between the pandemic and the political situation there could be a lot of back and forth until then, beyond if there is a disputed election result. For now the weight of the evidence still points to lower prices ahead in at least the short term. Jerry