Jerry Samet
10-30-2017, 06:20 PM
After Friday’s strong advance the market consolidated today in a constructive manner. The major averages were mostly lower on the day with the most weakness in the New York averages. The SPX was lower by .32% while the DOW continued to consolidate its recent almost parabolic advance with a decline of .36%. The Nasd averages acted better with some continued strength in mostly big cap tech stocks. The COMPQ was off by only .03% while the NDX was higher by .23%. The semiconductor stocks continued strong as the SOX gained .19%. Al l the major averages closed in the lower half of their intraday trading ranges. Volume was lower across the board, which is what you want to see when the major averages are consolidating gains. Leading stocks were mostly flat to slightly lower as well. Since the major averages broke strongly to new highs and the leaders index was still trading below its important 17dma with a fair number broken, I decided to create a new leaders index. It contains 23 stocks in 17different industry groups and is a good cross section of top performing stocks right now. The index was flat with a gain of .01% and closed in the upper half of its trading range. Solid performance after the three percent rally on Friday. The index is in a very strong advance, just what you want in a new index. Volume was lower than Friday, again what you want to see after a rally day and the relative strength line is in new high ground. I have included a chart of the old index for comparative purposes and will do so for the rest of the week. Also included is a text file with the components of the new index. Today’s action was constructive. Friday saw a rally into new high ground and today we say the major averages and the leaders index hold on to those gains well. Volume declined on the session showing that large institutional players were not dumping stocks at higher prices. There was additional strength in many leading tech stocks, some of which are reporting earnings later this week. If these reports are positive we could see another boost in these stocks and the overall market. It appears that the rally is resuming after its recent consolidation and it looks like we will see higher prices ahead, at least in the short term. Jerry