The market staged a powerful rally from the open. After gapping higher the major averages rose strongly for about an hour and a half. At that point they held the gains by going sideways for the rest of the session. The Nasd averages led the way with the COMPQ and the NDX higher by 1.06% and 1.11% respectively. The New York averages, lighter on tech, were also strong with the SPX gaining .65%. All the major averages closed at their intraday trading highs, a sign of buying throughout the day. Volume was also higher across the board, and about average on both exchanges. It is good to see higher volume as the major averages rally on a price basis. Leading stocks were strong as well with the leaders index rallying 1.82%. The index finished near the top of its trading range, producing a new high on both a closing and an intraday basis. Volume on the index was higher than yesterday and well above average, a sign that large institutional players were buying quality growth stocks. The relative strength line of the index also made a new high. The market appears to be in a rally mode after consolidating. The Nasd averages broke out last week and the New York averages are now joining them. All the major and secondary averages made new highs today, including the small caps, which have been lagging. There were several gaps today in the charts of major averages, which shows strong buying early that continued throughout the day. The leaders index is also showing very positive action. After consolidating it broke out four trading days ago and has now had four up days in a row, all on above average volume. This shows real conviction on the part of buyers. The market appears to be setting up a rally, likely into year end. I would expect higher prices, unless we get really bad news, like the Senate killing the tax bill. It won’t be a straight line up, but the evidence right now points to higher prices into year end. Jerry
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