Market ends the year strong

It appears that the upward trend will continue through January.

By Jim Van Meerten Jan 3, 2010 7:34PM
Every week, I step back and use the same tools to evaluate the market and try to decide my investment strategy for the coming week. I use Barchart for my data and the Value Line Index as my yardstick. I like the Value Line Index because it contains 1,700 stocks, giving me a broader view than the S&P 500 or the very narrow Dow 30. Let's see how the market did.

Value Line Index -- 1,700 stocks -- seems bullish
  • Down 1.20% for the week
  • Up 7.01% for the month
  • Up 57.95% for the year
  • Closed above its 20, 50 & 100 Day Moving Averages
  • Buy rating on 11 of Barchart's 13 technical indicators for an overall Buy rating of 88%

Barchart Market Momentum -- approximately 6,000 stocks -- percentage of stock closing above their daily moving averages for various periods -- majority closed above their DMAs

  • 20 DMA -- 69.73% closed above
  • 50 DMA -- 74.14% closed above
  • 100 DMA -- 72.75% closed above

Ratio of stocks hitting new highs to new lows for various periods -- above 1 bullish, 1 neutral, below 0.99 bearish -- This week still bullish

  • 20-day new high/new low ratio -- 1056/361 = 2.93
  • 65-day new high/new low ratio -- 518/138 = 3.75
  • 100-day new high/new low ratio -- 421/104 = 4.05

Summary & Strategy -- The market ended the year on an upward trend, and I see no reason that the trend won't continue through January. During the coming week I'll trim any stock that doesn't maintain a price level above it's 50 DMA and feel confident that I can replace it with a new position.

 

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

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