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JimVanMeerten (63.02)

Can 2 good weeks be called a rally?

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November 14, 2009 – Comments (1)

Each weekend on Financial Tides I review the previous week by using a BarChart analysis of the Value Line Index and the market as a whole. I use the Value Line Index because it contains 1700 stocks which make it a much broader index than the Dow 30 or the S&P 500. The Index was up for the second week in a row by 1.65% and 5.06% for the month. That's only 4.26% off its previous high made on 10/18/01. Each month I also include the Conference Board's Index of Leading Economic indicators which will be published this month on 11/19/01.

Value Line Index -- contains 1700 stocks -- Index up
BarChart's technical analysis indicators rate the Index a 32% buy with 7 buys, 3 holds and 3 sells -- not great but better than last week The Index is tracking above its 20, 50 and 100 day moving averages - a sign the market is trending upward

BarChart's Market Momentum -- contains approximately 6000 stocks -- percentage of stocks trading above or below their daily moving averages -- momentum up

20DMA -- 53.79% trading above 50DMA -- 51.21& trading above 100DMA -- 71.44% trading above

Ratio of stocks making new highs to stocks making new lows for various time periods -- above 1.01 bullish, 1.00 neutral, below .99 bearish -- this week we have a long term bull with 2 short term bears

20 day new high/new low ratio -- 422/611 = .69 65 day new high/new low ratio -- 225/302 = .84 100 day new high/new low ratio -- 230/199 = 1.20

Summary -- The market appears to be back into an upward trend but the new high/new low ratios shows we have a way to go before we can give a full blown bull signal. Don't be afraid to either stay invested or get back into the market.

Wall Street Survivor results -- On Top Stocks the contributors that mention stocks place those recommendations is a fantasy portfolio for a little friendly competition. For the week my portfolio was up 2.15% vs. the S&P gain of .57% and for the month I'm up 9.22% vs 5.33 for the S&P. I beat the market but that wasn't good enough to beat our leader Anthony Mirhaydan for both the week and month to date. His return is a fantastic 11.61% for the week and 29.58% month to date.

Disclosure: I do not hold any positions in the stock of my Wall Street Survivor portfolio at the time of publication.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please place a comment below or email FinancialTides@gmail.com

1 Comments – Post Your Own

#1) On November 14, 2009 at 1:12 PM, Varchild2008 (85.27) wrote:

"20 day new high/new low ratio -- 422/611 = .69 65 day new high/new low ratio -- 225/302 = .84 100 day new high/new low ratio -- 230/199 = 1.20"

"20DMA -- 53.79% trading above 50DMA -- 51.21& trading above 100DMA -- 71.44% trading above"

I like to use the De-Stipulator to see if it reflupicates around a Jivo Line past the 50 day moving average of a rhinocerous.

And based on the ratio of Pens versus Pencils I come to the conclusion that those of us who declared that we hit bottom back in MARCH and we are in a BULL MARKET RALLY were dead on correct....

Those who are still reducepting the rivet king line to see if it intersects the ratio of  buzzwords versus fabricated parenthesis are still wondering when the Bull Market is going to start.

In short...  Where were you back in March?  Why are you looking at ratios to determine if we are in a bull market rally when .. last time I checked.... we have been in one for more than half a year now.

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