IBD shows a return to confirmed rally this morning. Even though yesterday's price and volume action qualifies as a follow-through sized event, this was not a follow-through day that zeros the distribution count. This was a move from market under pressure to confirmed rally on a show of market strength. We maintain the distribution count in a 25-day trailing window of 1 on the NASDAQ and 3 on the S&P500.

Leading stocks however lagged. The median stock on the IBD 50 went up 0.82% whereas the NASDAQ index went up more than double this amount at 1.78%. The NASDAQ 100 went up 1.87%. Essentially leading stocks have been lagging for months. I have owned NXPI since November and it is up just 7.7%. BIIB is up 1.7% since December 19. This is lagging performance. Others owned along the way have been sold at a loss.

The MarketSchool model mirrors the IBD situation and shows 30% long based on yesterday's buy signal. In an environment where leading stocks lag it may be prudent to buy market pull backs using an index ETF of your choice or wait for leading stocks to lead again. Leading stocks breaking out of sound bases and moving up is the final confirmation of a rally.