This will be a great summer
This week the market got some legs under it. Each weekend I go back to Barchart to get the data for my 3 market yardsticks. This help me clear my head of all the sensational headlines I've read during the past week and just look at the data. I use 3 because although they usually go in tandem they each measure the market in different ways so I think it gives me a more complete feel of what is happening. Let's see what they tell us.
Value Line Index -- Approximately 1700 stocks so it is much broader than the S&P 500 or very narrow Dow 30 -- Up for the week
1 - The Index was up 2.51% for the week
2 - The Index is up 1.13% for the month
3- The Index has been up 3 weeks and down 2 weeks
4 - The Index closed Friday above it's 20 & 100 day moving average but below it's 50 DMA
Barchart Market Momentum -- The percentage of stocks closing above their Daily Moving Averages for various time frames -- Above 50% is always good
1 - Friday over 76.73% closed above the 20 DMA -- only 40.92% closed above the 50 DMA -- 51.44% closed above the 100 DMA
2 - Last week over 55.12% closed above the 20 DMA -- only 26.90 closed above the 50 DMA -- only 41.13% closed above the 100 DMA
3 - Last month only 9.26% closed above the 20 DMA -- only 17.09% closed above the 50 DMA -- only 33.95% closed above the 100 DMA
Ratio of stocks hitting new high/new lows for various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- We've got some bullish signs here
- 1 month ratio of new highs/new lows -- 1367/231 = 5.92
- 3 month ratio of new highs/new lows -- 276/140 = 1.97
- 6 month ratio of new highs/new low -- 237/94 = 2.52
Bonus Info -- Once a month the Conference Board publishes their Leading Economic Index -- The Leading Economic Indicators were positive .4%, Coincident Economic Indicators positive .4% and Lagging Economic Indicators negative only .1%. That's a great sign that the economy is in recovery.
Summary and Investment Strategy -- All three of my yardsticks have positive results and the Conference Boards Economic Indicators show the economy is in recovery. I'll still trim any under performing stocks but I intend to stay fully invested.
Jim Van Meerten is an investor who writes on financial matters on Financial Tides,Barchart Portfolio Blogs, Seeking Alpha, Marketocracy and MSN Top Stocks. Please leave a comment below or email JimVanMeerten@gmail.comDisclosure: No positions in the stocks mentioned at the time of publication