Looks like an upward trend

A objective analysis of last week's market action.

By Jim Van Meerten Nov 14, 2009 11:22AM
Each weekend on Financial Tides I review the previous week by using a BarChart analysis of the Value Line Index and the market as a whole.

I use the Value Line Index because it contains 1,700 stocks, which makes it a much broader index than the Dow 30 or the S&P 500. The Index was up for the second week in a row by 1.65% and 5.06% for the month. That's only 4.26% off its previous high made on 10/18.

Each month I also include the Conference Board's Index of leading economic indicators, which will be published on Nov. 19.

Value Line Index -- contains 1,700 stocks -- Index up
  • BarChart's technical analysis indicators rate the index a 32% buy with 7 buys, 3 holds and 3 sells -- not great but better than last week.
  • The index is tracking above its 20-, 50- and 100-day moving averages -- a sign the market is trending upward.

BarChart's Market Momentum -- contains approximately 6,000 stocks -- percentage of stocks trading above or below their daily moving averages -- momentum up.

  • 20DMA -- 53.79% trading above
  • 50DMA -- 51.21% trading above
  • 100DMA -- 71.44% trading above

Ratio of stocks making new highs to stocks making new lows for various periods -- above 1.01 bullish, 1.00 neutral, below .99 bearish. This week we have a long-term bull with two short-term bears.

  • 20 day new high/new low ratio -- 422/611 = .69
  • 65 day new high/new low ratio -- 225/302 = .84
  • 100 day new high/new low ratio -- 230/199 = 1.20

Summary -- The market appears to be back into an upward trend, but the new high/new low ratios show we have a ways to go before we can give a full-blown bull signal. Don't be afraid to either stay invested or get back into the market.

 

Wall Street Survivor results -- On Top Stocks the contributors who mention stocks place those recommendations in a fantasy portfolio for a little friendly competition. For the week my portfolio was up 2.15% vs. the S&P gain of 0.57% and for the month I'm up 9.22% vs 5.33 for the S&P. I beat the market, but that wasn't good enough to beat our leader Anthony Mirhaydari for both the week and month to date. His return is a fantastic 11.61% for the week and 29.58% month to date.

 

Disclosure: I do not hold any positions in the stock of my Wall Street Survivor portfolio at the time of publication.

 

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

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