Leaders Index 1-10-14

There were solid gains going yesterday in the pre market until the employment report came out. It was much weaker than expected and early trading was weak. A late rally erased the losses and the major averages closed at their intraday highs. There were small gains with the COMPQ leading the way with a .40% gain. The SPY was up .20% while the DOW was flat. Volume was lower across the board but was still above average on the Nasd. Leading stocks were mixed on the day with the leaders index declining .26% on much lower and below average volume. Much of the decline was caused by AMBA and QIWI which both took big hits. The index continues to trade sideways and on Friday it closed below it’s important 17dma. The picture among quality stocks has changed since the start of the new year. The almost across the board strength in leading stocks that we saw in the latter part of December has turned into more of a mixed bag as some stocks continue to act strong, but many others are breaking down or consolidating. The number of broken stocks in the leaders index is increasing and it is getting harder to pick winning stocks as the number of land mines is increasing. Both the leaders index and the major averages have been mostly consolidating in fairly tight ranges for the last couple of weeks and now we will have to see which way they break, up or down. Earnings season kicks off in earnest next week and that will likely set the tone for the direction of both leading stocks and the overall market. Jerry