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JimVanMeerten (62.86)

What a difference a week makes

Recs

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September 03, 2010 – Comments (1)

Last week things just weren't very solid. During the week there was still a lot of chatter about a double dip recession, the Hidenburg Effect and an impending bond bubble. Luckily the market didn't listen. Off with their talking heads! Let's look at our 3 yardsticks and see what really happened. We use 3 because no single yardstick works all the time. Barchart supplied tha data.

Value Line Index -- Contains 1700 stocks so it's much broader that the S&P 500 or very narrow Dow 30 -- Things looked good


1 - Index was up for the week by 4.30%

2 -  40% Barchart short term technical buy

3 - Friday closed above it's 20 & 50 day moving averag

4 -  14 day Relative Strength Index was 59.20% and rising

Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks trading above their Daily Moving Averages for various time frames -- Above 50% is always good

1 - Friday over 79.90% closed above their 20 DMA, over 71.21% closed above their 50 DMA, only 38.22% closed above their 100 DMA

2 -  Last week only 38.19% closed above their 20 DMA, just 51.04% closed above their 50 DMA, only 45.02 closed above their 100 DMA

3 -  Last month over 74.00% closed above thier 20 DMA, over 73.29% close above their 50 DMA, over 57.52% closed above their 100 DMA

Ratio of stocks hitting new highs/new lows -- 1.0+ bullish, 1.0 neutral, under .99 bearish -- Bullish for the first time in a while

1 month highs/lows -- 839/85 = 9.87

 3 month highs/lows -- 506/60 = 8.43

 6 month highs/lows -- 272/43 = 6.33

Summary and Investment Strategy -- Just because the market was up this week doesn't mean you should keep everything. Always trim out the stocks that are tanking or lagging far behind the market. Add freely but only if you find stocks that meet all of your criteria.

See you on Tuesday.

Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.

Disclosure: No positions in the stock mentioned at the time of publication

1 Comments – Post Your Own

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