Jerry Samet
07-11-2013, 11:13 PM
The market had a strong rally today in reaction to Bernanke’s press conference after the close yesterday where he basically said there was plenty more QE to come. The major averages all gapped up and rose between 1.36% on the SPY and 1.63% on the COMPQ and NYA. Volume was higher across the board which produced the FTD we have been waiting for. The market was strong into the close and finished at the highs of the day. The FTD caused IDB to go back into rally and the buy switch on the MEM was turned on and is now at +5 or fully invested. I put together a new leaders index to reflect recent breakouts and leading groups. The new index has 22 stocks in 19 different industry groups, representing a good cross section of quality stocks. The index rose 2.26% to a new high on higher and slightly above average volume. It is outperforming the major averages as can be seen in it’s RS line. Of the big three indicators we use to confirm follow through days only the %E at 12.9% confirmed this follow through. The weekly Coppock is not in a position to signal and there was no Eureka today. The last Eureka was twelve trading days ago so this doesn’t count, although another signal in the next week or so could still provide confirmation. The action of the overall market and some recent breakouts are positive, but it would have given me more conviction if the FTD was better confirmed. The long side should be played, but the poor confirmation means one should keep a close eye on the exits if anything should go wrong. One thing I will be watching is the A’s minus E’s. This indicator is very sensitive and will likely turn down early if the rally gets into trouble. Jerry