Jerry Samet
12-16-2017, 11:58 AM
The market staged a strong rally yesterday. The major averages opened higher and rallied for most of the remainder of the session. The greatest strength was in the Nasd averages with the COMPQ and the NDX higher by 1.17% and 1.20% respectively. The beaten down SOX gained 1.50%. The SPX rallied .90%. All the major averages closed at or very near their intraday trading highs. Volume was a lot higher across the board, but this was caused mostly the quadruple witching that occurred on Friday that always expands volume. Leading stocks participated in the rally as well with the leaders index gaining 1.46% on the day. The index closed in the upper half of its intraday trading range and remained above its 50dma support level. It is also just below its important 17dma. Breaking above this resistance level would be very positive. Volume on the index also grew and was above average, also due mostly to Friday’s expiration. The market rallied yesterday, mostly on news that the conference committee had come to a deal on the tax bill. A couple of fence sitting Senators also said that they would support it, almost guaranteeing that the final bill will be passed next week. The market has been whipsawed by news coming from Washington, and this now seems to have been resolved in a positive manor. The major averages are acting well with the Nasd averages now joining the New York averages in making new highs. Volume confirmed, even though the expiration on Friday inflated it. The charts of the major averages look good. Quality growth stocks are lagging though. The chart of the leaders index is well of new highs and is riding just above its 50dma. If you look at a chart of the IBD 50 you will see the same pattern. Quality growth stocks are lagging the overall market. This usually gets resolved with either the stocks rallying to catch up with the major averages or the major averages declining to meet the individual stocks. We will have to see which way it goes. Right now ETFs might be a better way to go than individual stocks. Jerry