The market staged a powerful accumulation day yesterday. A much better than expected employment report sparked a big gap up at the open. The major averages rallied nicely from there and then leveled off and held the large gains for the remainder of the session. All the major averages finished high in their intraday trading ranges, showing that there was little selling coming in as prices rose. The New York averages again were the strongest with the SPX gaining 2.62% on the day. The COMPQ and the NDX were higher by 2.06% and 2.02% respectively. Volume was higher across the board and very heavy. It was up by 37.39% on the New York and 8.77% on the Nasd. In fact I read that Nasd volume was the highest in history. This shows that large institutional players were heavy buyers yesterday. Leading stocks lagged the overall market again. The leaders index was lower by .33% yesterday. Two components of the index accounted for most of the weakness, but there were declines in many stocks in the index. It closed in the upper half of its trading range and held the short term 9dma. Volume was higher but below average. The relative strength line of the leaders index continued lower and is nearing its 50dma. The market reacted powerfully to a great employment report as evidence builds that the economy is recovering faster than anyone expected. The gains in the major averages were large and volume came in to confirm the price advances. The NDX made a new closing high and the COMPQ made a new intraday high but closed just below its old high. The New York averages are very close to their old highs. Virtually the entire loss from the Coronavirus selloff have been recovered. The only concern I see right now is the recent underperformance of leading stocks. The leaders index has lagged for four sessions now and the relative strength line has weakened. If the relative strength line breaks below its 50dma that would be a yellow flag as quality growth stocks usually top out before the overall market. Other than that there are few warning signs out there. Hopefully we will see leading stocks pick up and confirm the strength in the overall market, but for now we should see higher prices ahead. Jerry
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