Leaders Index 5-6

The market took a bit of a breather today after Friday’s strong results. The action was positive as the major averages held recent gains and built on them with small gains on the day. The major averages made new highs for the move and volume was lower across the board. This isn’t bad as volume receded as the market consolidated it’s recent gains. Leading stocks are acting well as there have been a solid number of new breakouts, including FLT, ALK, BLMN and ALGN along with several others. The leaders index had many broken stocks in it and with the major averages making new highs I thought a new index would be in order. The solid number of recent breakouts made this process easier. The new index has 23 stocks in it in 21 different industry groups. It is a very good cross section of quality stocks that are acting well and should give a good signal of when this rally is really in trouble. For the first time the index contains a REIT stock(don’t laugh until you see the chart). The index has been outperforming the overall market with a gain today of 1.14% on lower and below average volume. The RS line of the new index shows that quality canslim stocks are acting better than the SPY recently. The market clearly wants to go higher and all the money printing around the world is clearly driving things to new highs. Long the market is the place to be, but I would keep a close eye on the exits. Jerry