Market looks good so far

Every weekend I step back and use the numbers on Barchart to analyze the market action

By Jim Van Meerten Mar 21, 2010 2:26PM
Each weekend on Financial Tides I like to leave all the hype, adverbs and adjectives behind and let the numbers on Barchart give the feel of what the market really did. I use the Value Line Index as my stock market proxy, and it was down 0.11% for the week but still up 6.77% for the month to date. With 3 trading days left in the month it will be interesting to see where we close. Let's look at my 3 yardsticks.

Value Line Index -- The Index contains 1700 stocks which is much broader than the S&P 500 or the much narrower Dow 30 -- Still looks good
  • The Index closed Friday above its 20, 50 and 100 day moving averages
  • The Barchart technical indicators still rate the stock as a 72% buy with 10 buy, 2 hold and only 1 sell signal

Barchart Market Momentum -- Contains approximately 6000 stocks -- The percentage of stocks trading above their daily moving averages for various time frames -- Still appears positive

  • 20 DMA -- 73.85% closed above this week -- 85.33% last week -- 74.42% last month
  • 50 DMA -- 79.73% closed above this week -- 82.66% last week -- 61.08% last month
  • 100 DMA -- 80.31% closed above this week -- 81.51% last week -- 67.11% last month

The ratio of stock hitting new highs to new lows for various time frames -- 1.00+ bullish, 1.00 neutral, less than .99 bearish - We are bullish for all 3 time frames

  • 20 day ratio of new highs/new lows -- 1155/445 = 2.60
  • 65 day ratio of new highs/ new lows -- 743/159 = 4.67
  • 100 day ratio of new highs/new lows -- 667/105 = 6.35

Summary -- Overall the week was neutral but the 3 yard sticks show the market still has strength. This week I will continue to cull stocks dropping below their 50 day moving averages and feel confident with the strategy of replacing them with stocks hitting new highs.

 

Wall Street Survivor results -- The participants on Top Stocks have a friendly competition on Wall Street Survivor. The S&P was up 3.96% month to date and 3 of the competitors were able to beat the bench mark, Vad the Skeptical Capitalist leads the way with a return of 8.40 month to date and I'm in 6th place with a loss of .71%. Three days of trading left for me to break even.

 

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

 

Disclosure: I do not hold positions in the stocks in my model portfolios.

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