For years we have been searching for better measures of secondary stock activity. When the new Russell 1000, 2000 and 3000 indices were developed we thought our search was over. Despite some criticism of the Russell indices, we still think this index gives the best representation of secondary stock action.
The Leuthold Group's special research study on this subject was sent to clients last month.
The Major Trend Index improved somewhat in September but remains in negative territory. The strong September down move was no surprise, it appears that a major cyclical market top is in progress. Portfolio “Insurance” played a significant role in the September decline and it could play the reverse roll in a future market rally.