Every night, we measure the percentage "change of direction" of Leader Stocks
and the stocks in the Broad Market. We then divide the two to get a Ratio of
Leaders to Broad market stocks.
Leader stocks are named that for a very good reason ... they set the pace
and direction of the market. When the Leadership Ratio is high, they "pull
up the Broad market stocks".
Currently, the Leadership Ratio is positive, but very close to zero and the
Ratio is also divergent to the stock market's up movement. Negative divergences
can be a warning sign like it was in early February before the sharp drop.
With its current low reading and divergence, this is an "Alert condition" where
caution levels should now be elevated. (This information is posted daily on
our Advanced subscriber site.)
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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