Leaders Index 1-8-21

The market put in another overall positive session yesterday. The major averages opened higher but then sold off a bit. Late strength saw the major averages rally into the close and all finished at or very near their intraday trading highs. The Nasd averages led the way with the COMPQ and the NDX gaining 1.03% and 1.28% respectively. The SPX rallied a lesser .55%. The small and mid-cap stocks, along with the semiconductors were slightly lower on the day. Volume was mixed. It fell 5.56% on the New York and gained 7.62% on the Nasd. It is good that volume was higher on the Nasd which showed the best price gains. Leading stocks had a solid session as well with the leaders index gaining 2.68% on the day. The index closed high in its trading range and made new highs on both a closing and an intraday basis. The relative strength line of the leaders index also made a new high. Volume was higher and above average, a good sign as the index made new highs. The market continued to rally yesterday and it is looking like we are in a blow off phase of this market rally. I discussed the many red flags out there in my year end update, and now we are starting to see several leading stocks go into what looks like climax runs. This is also the type of action you see near important tops. The action of leading stocks remains strong, and this supports the market. The leaders index I put together on the follow through day on 11/4, through yesterday, is up 40.04%. The COMPQ is up 13.90% in the same period and the SPX gained 11.07% during this time. In the same period the IBD 50 gained only 4.50% and has not made a new high. The solid action in leading stocks would tend to indicate that the rally is not over and you never know how far these blow off situations can go. We are in a very high risk market and gains should be protected, but for now it looks like we have not seen the top yet. Jerry