Leaders Index 8-22-17

The market staged a solid rally session today. After opening strongly higher the major averages spent the rest of the day working their way higher. All the major averages closed at or very near their intraday trading highs, a sign of support. The Nasd averages led the way with the COMPQ gaining 1.36% while the SPX rallied .99%. Tech stocks were particularly strong as the NDX and SOX were higher by 1.50% and 1.61% respectively. Volume was a bit of a disappointment. It was slightly higher on the Nasd and lower on the New York. Leading stocks were higher as well with the leaders index gaining 1.52% on the day. The index made new highs on both a closing and an intraday basis, but closed in the lower half of its trading range, a little disappointing. One component, BZUN, dropped 24% on what looked like a pretty good earnings report. Since a drop of that magnitude can distort the index I replaced it with AVGO, a semiconductor stock on the verge of a breakout. Volume on the index was about flat, less than you would like to see. The relative strength line of the index also made a new high. Today’s action was positive, particularly on a price basis. The Nasd averages easily recovered their 50dma’s while the New York averages closed right at this important moving average. The real issue today was volume. When you have a big price advance you want strong volume to show that large institutional players were buying stocks. Nasd volume was higher but not by much. Today’s action was encouraging, but to show that it was not just a reflex bounce we will have to see more up days with volume behind them. Jerry