Market action was down

This week's market action was nothing to write home about.

By Jim Van Meerten Aug 20, 2010 3:04PM
This week's barometer will be a little early and based on the data I took off Barchart at noon on Friday. Not a great week for the market despite all the glowing promises I heard about the economy. That's why each week I step back from the headlines and use my 3 market yard sticks to figure our what really happened.

Value Line Index - Contains 1700 stocks so its broader than the S&P 500 or very narrow Dow 30 -- Things didn't happen
  • Price down .98% for the 4 1/2 day period
  • Price down 2.32% for the last 20 sessions
  • 9 of Barchart's 13 technical indicators signal sell for a 64% sell signal
  • Relative Strength Index is only 39.22% and falling
  • At Friday noon the Index was at 2265.19, that's below its 50 day moving average of 2345.33

Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks trading above their Daily Moving Averages for various periods --50% and above is good -- Nothing good here either

  • Friday at noon only 28.18% traded above their 20 DMA, only 45.34% traded above their 50 DMA, only 39.99% traded above their 100 DMA
  • Last week only 34.95 traded above their 20 DMA, over 50.84% traded above their 50 DMA, only 41.43% traded above their 100 DMA
  • Last month over 84.74% traded above their 20 DMA, over 68.44% traded above their 50 DMA, only 49.47% traded above their 100 DMA

Ratio of stocks hitting new highs/new lows for various time frames -- 1.0+ bullish, 1.0 neutral, under .99 bearish -- This indicator is very bearish

  • 1 month new high/new low ratio -- 68/1032 = .07
  • 3 month new high/new low ratio -- 38/483 = .08
  • 6 month new high/new low ratio -- 25/62 = .40

Summary and Investment Strategy -- Market action was negative. I'll keep trimming but not adding positions until I see some technical improvement in the market.

 

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

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