Weekly Market Recap -- W/E 10/8
Time for that weekly reality check where we let our 3 yard sticks tell us what really happened. I'll always use 3 because no single yard stick is right all the time. Each measures the momentum of the market but each in a slightly different way. The data is provided by Barchart.
Value Line Index -- Contains 1700 stocks so its broader than the S&P 500 or the very narrow Dow 30 -- Upward trend this week
1 - 96% Barcahrt technical buy signal
2 - Up in 12 of the last 20 sessions
3 - Up 1.79% for the week, Up 8.40% for the month
4 - 14 day Relativee Strength Index at 66.89% and rising
Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stock closing above their Daily Moving Averages for various time periods -- Above 50% is good
1 - Friday over 79.98% closed above their 20 DMA, over 84.90% closed above their 50 DMA, over 82.18% closed above their 100 DMA
2 - Last week over 79.79% closed above their 20 DMA, over 82.27% closed above their 50 DMA, over 78.14% closed above their 100 DMA
3 - Last month over 77.74% closed above their 20 DMA, over 82.27% closed above their 50 DMA, over 58.85% closed above their 100 DMA
Ratio of stocks hitting new highs/new lows for various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish - very bullish this week
1 month new highs/new lows -- 1233/137 = 9.00
3 month new highs/new lows -- 812/45 = 18.04
6 month new highs/new lows -- 378/34 = 11.12
Summary and Investment Strategy -- This week had definite upward momentum and seemed very solid. Next week is earnings week. We can expect some stocks that do not meet estimates to drop. Hopefully, there will be others that beat estimates and soar. Last earnings season Reuters wrote that 85% of all consensus estimates were wrong. This was more a function of bad analysis than it was a bad economy. I'll close out positions that drop too far and not be afraid to replace them with new stocks that show recent upward momentum.
Jim Van Meerten is an advisor to Marketocracy Capital Management who 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 email JimVanMeerten@gmail.com.
Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.