Leaders Index 4-2-14

The market exhibited positive action again today. After two strong up days in the last two sessions it would not have been surprising to see the major averages pull back a little today. Instead they closed with modest gains and finished in the upper half of their intraday trading ranges due to late strength. Volume was lower across the board, which is ok on a consolidation day after a strong advance. The SPY led the way with a gain of .29% and moved further into new high ground. The COMPQ was higher by .20% and moved further above it’s short term moving averages. Since the SPY has gone into new high ground and so many of the stocks in the leaders index were broken I created a new index to better show how quality stocks are doing. As you can see it has broken into new high ground on very heavy volume. The index contains 23 stocks in 17 different industry groups. I have included a list of the new index’s components in this update. The new index is setting new highs on both a price and a relative strength basis. I think it will give us good warning of a market break down. The market is acting pretty well now as the pattern of small corrections followed by a move to new highs has again repeated itself. How far it will go is impossible to tell, but for now it looks like things will move higher. Jerry

Thanks very much for your work Jerry.

I must admit, I find it very difficult to get my head around the psychology of the market when you introduce a new index. It confuses my perception of strength and weakness :o)

Trev

I agree Trev, but when the major averages go to new highs and there are so many stocks in the index under their 50dma's it really has to be done. Jerry