Weekly Market Recap -- 11/27
A confusing week to say the least but if you put the headlines aside and just look at the numbers you will see that the market has stalled but not reversed. We get our data from Barchart and use 3 yardsticks because although they each are a measure of market momentum, they each do it in a slightly different way. No single yardstick is accurate all the time so if we look at the market in 3 different ways we get a better feel of which way the trend is going.
Value Line Index -- Contains 1700 stocks so it is much broader than the S&P 500 or very narrow Dow 30 -- Shows a caution sign this week
1 - The Index gets a 64% Barchart buy signal
2 - Up .45% for the week
3 - UP 2.76% for the last month
4 - Closed Friday at 2679.79 which is 10.84% above its 50 day moving average of 2587.27
5 - Relative Strength Index is 57.40%
Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks closing above their Daily Moving Averages for various time periods -- Above 50% is always good -- This week we have a caution in the 20 DMA
1 - Friday only 46.06% closed above their 20 DMA, 59.69% closed above their 50 DMA, 75.15% closed above their 100 DMA
2 - Last Week only 47.44% closed above their 20 DMA, 64.39% closed above their 50 DMA, 77.35% closed above their 100 DMA
3 - Last Month 56.50% closed above their 20 DMA, 78.05% closed above their 50 DMA, 80.97% closed above their 100 DMA
Ratio of stocks hitting new high/new lows for various time periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- This week we have all 3 periods positive
1 month new highs/new lows-- 389/266 = 1.46
3 month new highs/new lows -- 321/96 = 3.34
6 month new highs/new lows -- 263/57 = 4.61
Summary and Investment Strategy -- The week wasn't strong but we didn't see a reversal either. We do have a mixed signal which should give you caution. The Value Line Index was up for the week but the majority (50%+) didn't closed above their 20 Daily Moving Average. Financial problems in Europe and political problems in Asia are making investors nervous. Nervous people don't invest. Watch these 2 yardsticks on a daily basis this week.
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.