Weekly Market Recap -- W/E 10/29
This week, really the last month has had so much volatility that each day it was hard to see if the market was going up or down. Every hour, every press release seemed to start a trend in a new direction. Let's step back and use Barchart to mine the data for our 3 standard market momentum yardsticks. No single yardstick tells the whole story and none are correct all the time.
Value Line Index -- Contains 1700 stocks so its much broader than the narrow S&P 500 or very narrow Dow 30 -- A very slight upward trend
1 - Barchart technical buy signal of 64%
2 - Up .12% for the week
3 - Up 3.71% for the last month
4 - Closed Friday at 2601.09 which is above its 50 Day Moving Average of 2460.56
5 - Relative Strength Index of 62.00% and slightly falling
Barchart Market Momentum -- Contains approximately 6,000 stocks -- The percentage of stocks closing above their Daily Moving Averages for various periods -- Above 50% is always good -- Still positive but weaker than in the last week and month
1 - Friday 58.49% closed above their 20 DMA, 78.56% closed above their 50 DMA, 81.67% closed above their 100 DMA
2 - Last week 67.48% closed above their 20 DMA, 81.65% closed above their 50 DMA, 83.30% closed above their 100 DMA
3 - Last month 79.33% closed above their 20 DMA, 82.01% closed above their 50 DMA, 77.87% closed above their 100 DMA
Ratio of stocks hitting new highs/new lows for various time periods -- 1.0+ bullish, 1.0 neutral, under .99 bearish -- positive for all periods
1 month new highs/new lows -- 614/426 = 1.44
3 month new highs/new lows -- 473/99 = 4.78
6 month new highs/new lows -- 310/68 = 4.56
Summary and Investment Strategy -- The market trend is not strong but it is upward. I will still trim stocks that aren't performing and will not be afraid to buy new ones. We have been in an upward trend since September and I see no reason why that won't continue. For those of you that have been in the market -- Good Job! For those of you that are still sitting on the sidelines I think it's time to start dollar cost averaging back in.
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: No specific stocks mentioned in this blog.