Leaders Index 1-24

[Jerry Samet]

The market continued to consolidate recent gains today as the major averages were little changed on the day. After selling off early the market spent the rest of the day working it's way higher and all the major averages closed near their highs of the day. Volume was mixed, slightly higher on the NYSE and slightly lower on the Nasd. The NYA barely missed a distribution day as it declined .19% on higher volume. Leading stocks were flat on the day as the leaders index climbed .01% on higher and above average volume. The index traded below it's 9dma but rallied to close above it so it continues to show strength even though it has been flat for the last four days. Overall the market is still acting well and the rally is intact for now. I will be away for a few days and the updates will resume next week. Jerry

[srevansjr]

How does Jerry select his Leaders Index? How often does he change the individual stocks? Thanks SR

[Mike]

How does Jerry select his Leaders Index? How often does he change the individual stocks? Thanks SR

Jerry is out of the area for the next few days. The leaders index is created after a market rally gets underway. The current rally started with a follow-through day on December 20. He screens for stocks with very good fundamentals and are technical leaders in the rally. He chooses them in a way to not allow more than 2 stocks from the same industry group to be a member of the index. He chooses something like 20-25 stocks in total. He then uses the program HGS (High Growth Stock Investor) to track that list of stocks as an index of equaly weighted stocks. By equally weighted I mean as if the same dollar value was invested in each equity.

The index is then monitored daily for signs of a weakening market. Dropping below a 17-day simple moving average for example would be an early sign. Failing the 50-day is usually the end.