Market creeps up

My weekly analysis of how the market really did and how I will invest in the coming week

By Jim Van Meerten Dec 12, 2009 11:47AM
Once a week I like to step back, block out the hype from the Internet and television, and decide for myself the state of the market and how I will invest during the coming week.

I use technical factors that I mine from BarChart and use the same approach every week so I can have a consistent view of the market.

First I see what the Value Line Index did. I like the Value Line Index because it uses 1,700 stocks, making it much broader than the S&P 500 or the narrow Dow 30. Short-term improvement this week.
  • Index closed at 2184.48 -- up for the week by .30% and has had a 8.93% price appreciation for the last 65 days
  • 9 of Barchart's 13 technical indicators signal buy for a 64% overall buy rating
  • Short term rating 80%
  • Mid term rating 75%
  • Long term rating 67%
  • Trend Spotter (TM) is still a sell but weakening
  • The Index is almost back to its high for the year of 2239.69 made on 10/19

BarChart market momentum looks at what percentage of stocks closed above their daily moving averages for various time periods, and covers nearly 6,000 stocks. The majority of the stocks closed above their DMA for all 3 time periods reviewed.

  • 20DMA -- 62.83% closed above
  • 50DMA -- 61.42% closed above
  • 100DMA -- 69.34% closed above

The ratio of stocks hitting new highs to new lows for various time periods -- 1.0+ bullish, 1.0 neutral, under 1.0 bearish -- Ratios for all 3 time periods show a positive market movement.

  • 20 day new high/new low ratio -- 857/465 = 1.84
  • 65 day new high/new low ratio -- 433/197 = 2.20
  • 100 day new high.new low ratio -- 385/123 = 3.13

Summary: Analysis of all 3 indicators I use show a market that although almost flat for the current week is showing improvement and is about to break back through it's previous high for the year. I will trim stocks that do not maintain a closing above their 50 DMA and not be afraid to replace them this week. I'll stay fully invested.

 

Wall Street Survivor results: The 8 Top Stock columnist that give individual stock recommendations maintain model portfolios of those recommendation on Wall Street Survivor for a little friendly competition. The S&P was up .06% for the month and 5 of our 8 contributors have beaten that return. First place goes to Tobin Smith with a return of 3.97% and I came in third with a 3.19% return for the month.

 

Disclosure: I do not hold any positions in the stocks in my Wall Street Survivor portfolio.

 

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

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