I like this market

It's showing signs of getting stronger. Think about getting back in.

By Jim Van Meerten Sep 17, 2010 5:56PM
Market action last week was stronger and gave me some hope for the future. We will use our three yardsticks because no single one tells it all. All the data come from Barchart. Let's see where we stand.

Value Line Index -- Contains 1,700 stocks so it's broader than the S&P 500 or very narrow Dow 30 -- Nice week mostly up
  • Trend Spotter: Buy
  • Barchart: 40% short-term buy signal
  • Closed Friday above its 20, 50 and 100 daily moving averages
  • Up 2.07% for the week
  • Up 3.76% for the month
  • 14-day Relative Strength Index of 95.26%

Barchart Market Momentum -- Contains approximately 6,000 stocks -- Percentage of stocks closing above their Daily Moving Averages for various time frames -- Above 50% always good.

  • Friday over 79.08% closed above their 20 DMA, over 72.71% closed above their 50 DMA, over 61.61% closed above their 100 DMA
  • Last week over 77.80% closed above their 20 DMA, over 69.35 closed above their 50 DMA, over 51.11% closed above their 100 DMA
  • Last month only 39.93% closed above their 20 DMA, just 50.77 closed above their 50 DMA, only 43.17% closed above their 100 DMA

Ratio of stocks hitting new highs/new lows -- 1.0+ bullish, 1.0 neutral, less than .99 bearish

  • 1 month new highs/new lows -- 1140/191 = 5.97
  • 3 month new highs/new lows -- 514/115 = 4.47
  • 6 month new highs/new lows -- 260/91 = 2.86

Summary and Investment Strategy -- I'm liking this market. We will trim losing positions and not be afraid to replace them. By the end of the week I think I'll be fully invested.

 

Jim Van Meerten is an adviser to Marketocracy Capital Management. You can read his blogs here and on Barchart Portfolio Blogs. Please leave a comment below or e-mail JimVanMeerten@gmail.com.

 

Disclosure: Jim Van Meerten through Marketocracy Capital Management has an interest in the stocks mentioned in this blog.

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