Weekly Market Recap
I've got to swear off reading all the financial news and following all the talking heads on CNBC, Bloomberg and Fox Business news. By the end of the week I'm so confused about what happened and why, that my head is just spinning. Each weekend I use Barchart to mine the data that tells me what happened and how I should plan my next week. I use 3 different yard sticks that each measure the market's momentum but each does it in a slightly different way. I feel good when all 3 point in the same direction as they do this week. Let's take a look.
Value Line Index -- Contains 1700 stocks so its broader than the S&P 500 or the very narrow Dow 30 -- Looks good this week
1 - 96% Barchart technical buy signal
2 - Index up 1.14% for the week
3 - Index up 8.41% for the last month
4 - Closed Friday above its 20, 50 and 100 daily moving averages
5 - 14 day Relative Strength Index is 65.85% and rising
Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks closing above their Daily Moving Averages for various time frames -- Above 50% is always good
1 - Friday over 79.44% closed above their 20 DMA, over 82.13% closed above their 50 DMA, over 77.98 closed above their 100 DMA
2 - Last week over 81.54 closed above their 20 DMA, over 80.39% closed above their 50 DMA, over 74.08% closed above their 100 DMA
3 - Last month over 68.70% closed above their 20 DMA, over 64.41% closed above their 50 DMA, over 52.52% 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 -- Bulls have it this week
1 month ratio of new highs/new lows -- 1062/149 = 7.13
3 month ration of new highs/new lows -- 620/47 = 6.39
6 month ratio of new highs/new lows -- 305/35 = 8.71
Summary and Investment Strategy -- The Conference Board says the economy is recovering and, all 3 of my yard sticks say the market currently has upward momentum. During the coming week I'll cut stocks that aren't performing in an upward manner and be confident that I can replace them in this rising market.
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.