I enjoyed the ride this week

I hope you didn't miss this weeks upward ride. I think it looks good for next week too.

By Jim Van Meerten Sep 25, 2010 11:34AM
This was a very good week in the market.  How good was it?  Let's go to Barchart and get our data for the 3 yard sticks I use at the end of every week to see where we really stand.  3 yard sticks are used because no single one tells me everything I'd like to know.

Value Line Index -- Contains 1700 stocks so it's broader than the S&P 500 or very narrow Dow 30 -- Nice upward price momentum
  • Barchart 80% buy signal
  • New highs in 11 of the last 20 session
  • Up 2.58% for the week
  • Up 11.36% for the last month
  • 14 day Relative Strength Index is 63.56% and rising
  • Closed Friday at 2487.87 above its 50 day moving average of 2362.65
Barchart Market Momentum -- Contains approximately 6000 stocks -- The percentage of stocks closing above their Daily Moving Averages for various time periods -- Above 50% is good -- This week was great
  • Friday over 81.68% closed above their 20 DMA, over 80.49% closed above their 50 DMA, over 74.39% closed above their 100 DMA
  • Last week over 78.97% closed above their 20 DMA. over 72.86% closed above their 50 DMA, over 66.78% closed above their 100 DMA
  • Last month only 26.50% closed above their 20 DMA, only 41.52% closed above their 50 DMA, only 38.32% closed above their 100 DMA
Ratio of stock hitting new highs/new lows for various time periods -- Above 1.0 Bullish, 1.0 Neutral, below .99 Bearish -- Very Bullish this week
  • 1 month new highs/new lows -- 1199/109 = 11.00
  • 3 month new highs/new lows -- 629/55 = 11.44
  • 6 month new highs/new lows -- 321/42 = 7.64
Summary and Investment Strategy --  This week the upward momentum was very robust and showed no weaknesses.  During the coming week I'll continue to trim from my portfolios those stocks that the rally has left behind and won't be afraid to replace them as long as the momentum continues.

Jim Van Meerten is an advisor to Marketocracy Capital Management who uses his model portfolios not only to manage their mutual funds but also their clients Separately Managed Accounts. You can read his blogs about those model portfolios and investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
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