Jerry Samet
04-13-2019, 12:08 PM
The market staged a solid rally yesterday. After gapping higher at the open the major averages spent the rest of the session holding on to those gains. The highs were made in the first half hour and the market held on to them nicely. The New York averages were a bit stronger with the SPX rallying .66% while the COMPQ and the NDX gained .46% and .44% respectively. All the major averages finished at or very near their intraday trading highs, a good sign as there was not much selling coming in as prices rose. Volume was mixed. There was a big increase in volume on the New York and Nasd volume was lower but by only .78%. Leading stocks were generally higher as well, but losses in a couple of components of the index sold off. The leaders index was lower by .13%, but closed in the upper half of its trading range. It remains above all its short term moving average support levels and made a new high on an intraday but not a closing basis. Volume was higher but still below average. The market made a strong open on good earnings reports from a few banks and a strong rally from DIS after it announced its new streaming service. The price gains were good and all the major averages made new highs for the move. The higher volume on the New York was also encouraging. All the major averages are now within one or two percent of their all-time highs made late last year. At this point it seems almost certain that they will overcome these resistance levels. We are coming into the heart of earnings season and the quality of the reports will have a lot to do with the direction of the market going forward. The action up to now is good and it would take a pretty serious event to prevent the market from making new highs. The leaders index has performed well and is also close to new highs. If you take the closing price of the leaders index on the follow through day of Jan. 4 until now the index is higher by almost 24%. Not a bad performance for a static index of quality growth stocks. The index is however just over three months old and has several components that have broken badly. Over the next few days I will likely either come up with a new index or simply replace some of the broken stocks with new ones so the index better tracks the stocks that are currently leading. Jerry