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JimVanMeerten (65.24)

Market Momentum Continues Upword - Code Green!

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September 19, 2009 – Comments (4)

At the end of each week on my blog Financial Tides I like to analyze what the market did by using several ways to evaluate the trend. There is some tracking error in each method which is why I like to use several and then compare the results of each to get a consensus. I use BarChart to get all my data.

Value Line Index - This is an arithmetic index of 1700 stocks followed by Value Line. I like an arithmetic index because it duplicates the way most individuals purchase stocks. You buy 10 or 20 stocks with equal dollar amounts of each. Professionals and mutual funds might weight by market cap but most individuals don't.

This week BarChart used 12 technical indicators and the VLA was a BUY in 12 of 13 indicators with only one HOLDThe Index was tracking above its 20, 50 and 100 Day Moving Average (DMA)

BarChart Market Momentum - This week BarChart followed 6000+ stocks and determined how many traded above their Daily Moving Average (DMA)

85% above the 20 DMA87% above the 50 DMA90% above the 100 DMA

This is very positive and was above the percentages for last week and last month.

BarChart New High/ New Low ratios - I take how many stocks hit new highs vs new lows for various time periods. A number 1.0 or greater shows an upward trend.

20 day H/L ratio - 1635/204 = 8.065 day H/L ratio - 1167/50 = 23.3100 day H/L ratio - 1047/35 = 29.9

Clearly there are many more stock hitting new highs than new low so that is a very positive sign.

Summary: All my indicators are in the same direction - UP. The Stock Market appears to be having a short, mid and long term trends all in the same upward direction - I call a CODE GREEN and would continue to BUY into this market.

I'd like some feedback to find out is this analysis is helpful to you. Please feel free to make comments below or email me at FinancialTides@gmail.com

4 Comments – Post Your Own

#1) On September 19, 2009 at 12:02 PM, cthomas1017 (98.42) wrote:

Question...  (And I do appreciate your approach to this, so please do not take my questions as challenging, only curious as I tend to be a contrarian investor when I see "all market indicators UP!")... 

If we went back and looked at all your indicators at big market turns in the past (let's say March 6, earlier this year for example) - those times when market sentiment does a '180' - do your indicators predict a move from CODE GREEN to CODE RED? 

Thanks!  I really look forward to your reply. :)

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#2) On September 19, 2009 at 12:10 PM, JimVanMeerten (65.24) wrote:

My indicators are CODE GREEN - Market in an upward trend, CODE YELLOW - Use caution trim your loses but be leary of new positions, CODE RED - The makets is trending down either no new positions are start looking at shorting the market.

I use 2 time measures - short mid and long term roughly around 1 month, 2 1/5 months and 5 months.  These are just to keep you from riding a dead horse into the ground.

I'll give up the top 10% and bottome 10% for each bull anbd bear rally but if I can ride the middle 80%, I'm happen.

 

I consistenly beat the market on all 1 year plus measurements.

Financial Tides 

 

 

T

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#3) On September 19, 2009 at 12:15 PM, starbucks4ever (97.89) wrote:

I believe in Rotschield's principle: one should try to miss the first and the last 20% of a major market move and ride the middle 60%.

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#4) On September 20, 2009 at 7:55 AM, JimVanMeerten (65.24) wrote:

Hopefully, with my Weekly Market Momentum indicators we can squeeze out a few more percentage points for you.  every little bit helps

 

JIm Van Meerten

Financial Tides

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