Market in Recovery
The headlines were confusing but the numbers tell it all. Every weekend we step back from all the hype and use Barchart to get the data for our 3 yardsticks to gauge the market. 3 yardsticks are necessary because although they all measure momentum they each do it in a slightly different way. Let's see what happened.
Value Line Index -- Contains 1700 stocks so its much broader than the S&P 500 or the very narrow Dow 30 -- Slightly upward trend
1 - 60% Barchart short term technical signa
2 - lUp .53% in the last week
3 - Up 4.22% in the last month
4 - Closed Friday at 2667.85 which is 12.28% above its 50 day moving average of 2567.18
5 - Relative Strength Index 58.20%
Barchart Market Momentum -- Contains approximately 6000 stocks --Percentage of stocks trading above their Daily Moving Averages for various time frames -- Watch this indicator in the coming week -- Above 50% is always good
1 - Friday only 49.58% closed above their 20 DMA, 64.54% closed above their 50 DMA, 77.29% closed above their 100 DMA
2 - Last Week 52.05% closed above their 20 DMA, 70.34% closed above their 50 DMA, 79.34% closed above their 100 DMA
3 - Last month 67.49% closed above their 20 DMA, 81.73% closed above their 50 DMA, 83.11% closed above their 100 DMA
Ratio of stocks hitting new highs/new lows for various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- Still OK
1 month new highs/new lows -- 367/328 = 1.12
3 month new highs/new lows -- 309/106 = 2.92
6 month new highs/new lows -- 246/75 = 3.28
Summary and Investment Strategy -- The market took a breather but not a reversal. This week I'll look at the Barchart Market Momentum indicator and wait for 50% of the stocks to start trading above their 20 Day Moving Averages again. Then I'll breath a sigh of relief.
Jim Van Meerten is an advisor to Marketocracy Capital Managementwho uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or emailJimVanMeerten@gmail.com.
Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.