Jerry Samet
11-28-2018, 07:30 PM
The market staged a powerful rally today. The major averages opened higher and treaded water for a while. Then in a speech Powell made some very dovish comments and made it sound like there would be fewer interest rate hikes next year than the market expected. A strong rally began right away and continued into the close. All the major averages posted good gains with the COMPQ and the NDX higher by 2.95% and 3.17% respectively. The SPX gained 2.30%. All the major averages finished at the top of their intraday trading ranges, a real sign of support. Volume was higher across the board, showing that large institutional players were in there buying stocks. This was enough to produce a new follow through on the COMPQ. Leading stocks were strong as well. Since there was a new follow through I created a new leaders index. It has 21 stocks in 16 different industry groups. I have included a text file with the components of the new index. The new index rallied 3.69% today and closed near the top of its trading range. This is a new closing high but not a new intraday high. The index doesn’t have the strong straight up look that most new leaders indexes have, but few stocks have those kinds of charts right now. The relative strength line is strong and at a new high. The market has been trying to rally for few days now and Powell’s remarks sparked a good rally today. It is the fifth day of a rally attempt on the COMPQ so it counts as a new follow through. The action was strong and volume confirmed the price action. This follow through looks a bit better than the last one on 11/7 that quickly failed. The Eureka signaled today and so confirms the follow through. The %E’s are 19.7%, too high to confirm. The weekly Coppock is slowing its decline and could possibly signal next week. That would be very positive. Overall this follow through looks better than the last one. It has better confirmation and there was good action in individual stocks as there were several attractive set ups. I said before that ULTA was the stock to watch in the last rally attempt. ULTA is close to breaking the pivot point of its breakout. Two stocks that look interesting now and I would say are the ones to watch on this rally attempt are YETI and EEFT. The major averages must now regain their 200dma resistance levels as the next step in proving if this is a tradable rally or not. Jerry