JimVanMeerten (62.17)

The market just keeps tanking

July 03, 2010 – Comments (4)

On Barchart Portfolio Blogs I bring to your attention stocks you might want to consider for your portfolio. Ever weekend I try to ignore all the headlines and conjectures and just look at the facts. Barchart is the best place to mine the data I need. I use 3 yard sticks because 1 just doesn't give me the whole picture. Let's see where we ended the week.

Value Line Index -- Contains 1700 stocks so I think it is a better representation of the market than the narrow S&P 500 or even narrower Dow 30 -- Very ugly this week
1 - Sell signals on 12 of the 13 Barchart technical indicators for a 96% overall sell signal

2 -  Down 6.32% for the week and 8.54% for the last month

3 -  Friday closed below its 20, 50 & 100 Daily Moving Average

4 -  Trend Spotter (tm) sell signal Closed Friday at 2193.31 -- Way below it's 50 Day Moving Average of 2422.33

Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks trading below their Daily Moving Averages for various time periods -- Above 50% is bullish, below 50% bearish -- The bear is raging

1 - Friday only 24.30% closed above their 20 DMA, only 24.07% closed above their 50 DMA, only 27.72% closed above their 100 DMA

2 -  Last week more than 54.30% closed above their 20 DMA, only 36.11% closed above their 50 DMA, only 41.95% closed above their 100 DMA

3 -  Last month only 23.70% closed above their 20 DMA, only 20.41% closed above their 50 DMA, only 33.30% closed above their 100 DMA

The Ratio of stocks hitting new highs/new lows for various time periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- The bears are raging here too

 -- 1 month new highs/new lows -- 316/1100 = .29

 -- 2 month new highs/new lows -- 150/762 = .20

 --  6 month new highs/new lows -- 126/469 = .27

Summary and Investment Strategy -- The market seems to be totally ignoring any positive news or economic data and heading downward almost every day. During periods when economic data is positive ( I'm speaking of the Conference Board's Economic Indicators ) and the stock market is negative should be a period of caution for investors. You'd like to see both positive or both negative so you can be confident with a long or short strategy. These periods of porpoising is when you can get burnt. I'll trim my losers but keep the proceeds in cash till I get clear trends from both the economic and market data.