Jerry Samet
02-14-2018, 06:29 PM
The market staged a strong rally today. After the major averages opened lower it looked like it would be a negative session, but the major averages bottomed out after only about ten minutes and spent the rest of the session rallying. The gains were impressive with the COMPQ higher by 1.86% and the SPX gaining 1.34%. All the major averages closed at their intraday trading highs, a sign that there was buying throughout the day. Volume was higher across the board and about average on both exchanges. This is want you want to see as prices rise and constituted a new follow through day on all the major averages. For this reason I created a new leaders index that better reflects the stocks that are leading the market now. It consists of 21 stocks in 17 different industry groups. There is a text file included with today’s update that has the list. The new index was higher by 3.06% on the session. It closed at the top of its trading range and in new high ground on both a closing and an intraday basis. The relative strength line of the index is also very strong, just what you want to see in a new index. I said yesterday that there were two things to keep an eye out for now. A follow through and a break of the major averages above their 50 day moving averages. We got a follow through today on all the major averages and the Nasd averages broke solidly above the 50dma. This returns the market to an uptrend. Now we should look at the three indicators we use to confirm follow throughs. The weekly Coppock is not in a position to signal and will not confirm. The %E’s are in the proper range and do confirm this follow through. I don’t have the data yet on the Eureka, but I will report it tomorrow. The day’s action was very positive and it looks like the market will again make a run for new highs. The number of stocks in the right set up are small but the are some good candidates. ETF’’s are also a good way to get some quick exposure. The market is signaling a new or renewed uptrend and increasing exposure is the right thing to do right now. Jerry