The roller coaster continues
Although the market was up and down it ended down for the week
Value Line Index -- Contains 1700 stocks so it's much broader than the S&P 500 or the very narrow Dow 30 -- This week the Index was down
- Down by 5.50% for the week
- Had 2 up days and 3 down days
- Had 2 up weeks and 3 down weeks
- Had 3 up months and 2 down months
- Closed Friday below its 20, 50 and 100 day moving averages
- Barchart technical sell signal of 64% -- 2 buy, 1 hold and 10 sells
Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks closing above their Daily Moving Averages for various time frames -- More than 50% bullish -- Less than 50% bearish -- Very bearish this week
- 20 DMA -- only 10.20% closed above Friday -- 27.67% last week -- 77.65% last month
- 50 DMA -- only 18.13% closed above Friday -- 40.07% last week -- 85.12% last month
- 100 DMA -- only 36.67% closed above Friday -- 60.96% last week -- 86.41% last month
Ratio of stocks hitting new highs to stocks hitting new lows for various time frames -- 1.0+ bullish, 1.0 neutral, less than .99 bearish -- major bearish signal
- 1 month ratio of stocks hitting new highs/new lows -- 156/2906 = .05
- 3 month ratio of stocks hitting new highs/new lows -- 111/1692 = .07
- 6 month ratio of stocks hitting new highs/new lows -- 84/846 = .10
Investment Strategy -- The market is trending downward and the brief reversals on last Monday and Friday can't change that. I am not panicking. I will continue to cull stocks trading below their 50 day moving averages if I feel that in the short run they are not showing signs of recovery. I will hold off buying replacements until the market as measured by the Value Line Index is again trading above its 20 day moving averages.
Trade with your brain not with your emotions!
Disclosure: No positions mentioned
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A light news day combined with heavy technicals weighed on the market.
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