Leaders Index 12-20

The market rallied strongly today as the major averages rose about 3% on volume that was higher across the board. This produced an FTD and IBD put the market in rally mode. Leading stocks performed about in line with the major averages with the leaders index rising 3.24% on higher but still well below average volume. There was news about a rise in housing starts(mostly apartments), but the big news of the day was a better than expected bond auction in Spain. This is a very news driven market and I said before that a news story could trigger an FTD and it did today. This is not the best reason for a follow through. The big three indicators that we use to confirm FTD's were generally not supportive. The weekly Coppock is not in a position to signal so it did not confirm. The %E's were 7.3%, just below the level you see in successful follow through and there was a Eureka today so that confirmed. Although the %E's were close only one of the big three confirmed. In a bear market this is not encouraging. I think this FTD should be treated with caution. Jerry