Leaders Index 1-2-17

The market put in a strong performance to open 2018. The major averages opened higher and rallied for the rest of the session. In contrast to recent action leadership today shifted back to Nasd averages and tech stocks. The COMPQ and the NDX rose by 1.50% and 1.80% respectively. The SPX did well also, but lagged with a gain of a still solid .83%. The greatest strength was in the semiconductor stocks as the SOX rallied 2.77% on the session. Steady buying throughout the day saw all the major averages close at their intraday trading highs, a positive development. Volume was higher across the board and about average on both exchanges. This shows that large institutional players were buyers today. Leading stocks had a strong session as well. There was a shift in leadership today as the Nasd averages and tech stocks were the strongest performers. Since the old leaders index was stuck around the 50dma I created a new index today. It contains 22 stocks in 18 different industry groups. The new index rallied 3.19% today and closed at its highs of the session. Volume was much higher and well above average. This shows strong buying in quality growth stocks. It also made new highs on a closing and an intraday basis, along with a new high in the relative strength line. I have included a chart of the previous index, which gained 2.40% on the day. The market started out 2018 on a very strong basis. There were new highs in several of the major averages and the COMPQ closed above 7000 for the first time. The return of more traditional quality growth stocks to the leadership today was encouraging. One day does not make a trend, but if the major averages can continue to rally along with quality growth stocks it will bode well for higher prices in at least the near future. Jerry