Leaders Index 5-24-16

.The market had a strong rally today. After opening higher the major averages continued to rally for the rest of the session and closed near their intraday trading highs. The COMPQ finished with a gain of 2.0% while the SPX rallied 1.37%. The greatest strength was in the small caps and the semiconductors with the RUT higher by 2.15% and the SOX gaining 2.42%. Volume was higher today so it showed clear buying by large institutional players. All the major averages recaptured their important 50dma’s. IBD went back to a rally resumption, but not a follow through so the distribution count is not wiped clean. The leaders index was over three months old and looking pretty sickly so I took the opportunity to create a new index. It has 21 stocks in 17 different industry groups so I think it is a good cross section of quality growth stocks that are acting well now. I have included a text file with the composition of the new index. It looks strong, as you want in a new index and will hopefully give good warning of future weakness. I looked at the three indicators I use to confirm follow through days to see how they did. I know IBD didn’t call one but I thought it would be interesting. The weekly Coppock is not in a position to signal so it did not confirm. There was no Eureka signal today and the %E’s are at 6%, to low to confirm. If this were a follow through it would be poorly confirmed. This is a very difficult market and just when you think that there would be a breakdown there is a rally. It was a positive session, but I would still not get to aggressive just yet. Jerry