Jerry Samet
10-26-2013, 11:39 AM
The market opened strong yesterday as the major averages all gapped up at the open. They lost almost all of those gains during the session before a late rally recovered some of those gains. The New York averages closed near their intraday highs while the COMPQ closed in the lower half of it’s range. The gains were about .40% across the board. Volume was mixed, higher on the Nasd and slightly lower on the New York. Leading stocks had another tough day as the leaders index fell 1.80% on lower and well below average volume. The index closed above it’s important 17dma, but has now tagged this moving average four days in a row. The RS line of the index is now showing lower highs and lower lows, a negative sign. The index itself looks like it is putting in a lower high but has not made a lower low yet. The fact that quality stocks are struggling as the major averages make new highs is a troubling sign. These stocks should lead the market in a healthy environment. Weakness in the leaders combined with building distribution(we had three last week if you count yesterday’s stalling day) is a big negative for the market. If leading stocks continue to do poorly it is hard to see the overall market holding up. Jerry