Ying yang market

The market yanged then yinged than yang again

By Jim Van Meerten Oct 31, 2009 12:41PM
This week we had a ying yang market but unfortunately there was more yang than ying so we are down for the second straight week.

As measured by the Value Line Index of 1700 stocks, we were down 6.26% this week and 1.74% last week with an October loss of 5.31%.

Let's see how the market did using my standard market momentum criteria as found on BarChart:

Value Line Index -- an index of 1700 stocks: Trending downward but not to panic yet.
  • The Index was down 6.26% this week, down 1.74% last week and down 5.31% for the month.
  • The Index is tracking below its 20 & 50 day moving average but above its 100 day moving average.
  • The Index is off its market high on 10/19 by 9.13%

BarChart market momentum indicators -- a review of how approximately 6,000 stocks are trading against their daily moving averages: Down but still above the 100 DMA 

  • 20 DMA - 85% trading below their DMA
  • 50 DMA - 68% trading below their DMA
  • 100DMA - 67% trading above their DMA

Ratio of new highs to new lows for various periods, with 1.0+ bullish, 1.0 neutral, and below .99 bearish: We are bearish for all 3 periods.

  • 20 day new high/new low ratio -- 221/2265 = .10
  • 65 day new high/ new low ratio -- 107/710 = .15
  • 100 day new high/new low ratio -- 97/302 = .32

Summary: We had a very bearish week and all my BarChart indicators show a very downward trend.

Economists are saying the market is in recovery but we have had a 9.13% retraction of the stock market from our earlier high on Oct. 19.

Many were expecting a 10% correction so I hope that is it. I'll be trimming my positions that fall below their 50 DMA but will not replace those positions until I see some market support.

On my Wall Street Survivor portfolio I have placed sell orders for ESC -- Emeritus and VRUS -- Pharmasset both trading below the 50 DMA. My portfolio in is dead last place in the competition. I purchased stocks that had a greater beta than the other players and the down market crushed me harder. Next month is another month.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please make a comment below or email FinancialTides@gmail.com

At the time of this writing, Jim Van Meerten did not hold positions in any of the stock mentioned in this blog.

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