Nice end to the year
January 03, 2010
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Every week I like to step back and use the same tools to evaluate the market and try to decide my investment strategy for the coming week. I use Barchart for my data and the Value Line Index as my yardstick. I like the Value Line Index because it contains 1700 stocks giving me a broader view than the S&P 500 or the very narrow Dow 30. Let's see how the market did.
Value Line Index - 1700 stocks - seems bullish
1 - Down 1.20% for the week
2 - Up 7.01% for the month
3 - Up 57.95% for the year
4 - Closed above its 20, 50 & 100 Day Moving Averages
5 - Buy rating on 11 of Barchart's 13 technical indicators for an overall Buy rating of 88%
Barchart Market Momentum - approximately 6000 stocks -- percentage of stock closing above their Daily Moving Averages for various periods -- majority closed above their DMAs
1 - 20 DMA -- 69.73% closed above
2 - 50 DMA -- 74.14% closed above
3 - 100 DMA -- 72.75% closed above
Ratio of stock hitting new highs to new lows for various periods - above 1.0 bullish, 1.0 neutral, below .99 bearish -- This week still bullish
1 - 20 day new high/new low ratio -- 1056/361 = 2.93
2 - 65 day new high/new low ratio -- 518/138 = 3.75
3 - 100 day new high/new low ratio -- 421/104 = 4.05
Summary & Strategy -- The market ended the year on an upward trend and I see no reason that the trend won't continue through January. During the coming week I'll trim any stock that doesn't maintain a price level above it's 50 DMA and feel confident that I can replace it with a new position.
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please feel free to leave a comment below or email JimVanMeerten@gmail.com
Disclosure: No individual stock mentioned
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