Market improving slightly

The market recovered last week but the bull isn't back yet -- technical analysis of the market

By Jim Van Meerten Nov 7, 2009 10:22AM
On Financial Tides at the end of each week after all the smoke clears and the analyst go home I like to take an objective view of what the market really did and how it stands in relationship to the big picture. This week the market had to overcome the big news of a 10.2% unemployment rate, a rate that though still climbing is not climbing as fast as before. Remember the unemployment rate is a lagging economic indicator.

I use BarChart for my technical analysis data. I like the Value Line Index instead of the Dow 30 or S&P 500 because it contains 1700 stocks making it a much broader indicator.

Value Line Index - improving but not back all the way
  • The Index was up 3.35% for the week but is still off its previous high by 6.08%
  • BarChart's 13 technical indicators still have the index a sell with 4 buys, 4 holds and 5 sells although the sells are weakening and the holds are to the bullish side
  • The Index is plotting below the 20 & 50 day moving average but is still above the 100 DMA

BarChart Market Momentum -- the percentage of stocks trading above or below their Daily Moving Averages -- 6000 stocks -- support at the 100 DMA

  • 20 DMA -- 64% trading below
  • 50 DMA -- 53% trading below
  • 100 DMA -- 72% trading above

The ratio of stocks hitting new highs to new lows for various periods - bullish above 1.01, neutral 1.00, bearish below .99 - the ratios this week are getting better

  • 20 day new high/new low ratio -- 414/456 = .91
  • 65 day new high/new low ratio -- 276/203 = 1.36
  • 100 day new high/ new low ratio -- 257/111 = 2.32

Summary -- a week of a little bit of recovery but not a full blown bear market yet. I'll cautiously add a few stocks to my Wall Street Survivor portfolio but only if they meet all my buy criteria.

I did fine on my Wall Street Survivor portfolio with a gain of 6.92% for the week, better than the 3.35% for the Value Line Index. That was good enough for 3rd place but not as good as Anthony Miraydan who beat us all with a 16.09% return

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

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

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