A short but sweet week on Wall Street

Christmas week was good, and the year's last few days are also looking up.

By Jim Van Meerten Dec 26, 2009 2:45PM
Each week I use BarChart to step back from all the noise and evaluate how the market really performed and determine my investing strategy for the coming week. I like the Value Line Index because it contains 1,700 stocks, giving me a much broader view of the market than the narrower S&P 500 or the very narrow Dow 30. The market as measured by the Value Line Index was up 3.60% for the week and 8.32% month to date. With only four more trading days left in 2009, we should end the year on a good note.

Value Line Index -- 1,700 stocks: All indicators are positive.
  • All 13 BarChart technical indicators have a buy rating for a 100% buy rating overall
  • The index closed Friday above its 20, 50 & 100 daily moving averages
  • The Index has had a price appreciation in 12 of the past 20 trading sessions and is 5 for 5 recently
  • The Index has had a 7.89% price appreciation in the last 65 sessions

BarChart Market Momentum Indicator -- percentage of stocks closing above their Daily Moving Averages for various time frames -- approximately 6000 stocks. Positive for all three time frames.

  • 76.79% closed above their 20 DMA
  • 74.06% closed above their 50 DMA
  • 74.79% closed above their 100 DMA

Ratio of stocks hitting new highs to new lows for various time frames -- 1.0+ bullish, 1.0 neutral, less than .99 bearish -- very bullish

  • Ratio of stocks hitting new highs to new lows for the last 20 days -- 1614/203 = 7.95
  • Ratio of stocks hitting new highs to new lows for the last 65 days -- 913/124 = 7.36
  • Ratio of stocks hitting new highs to new lows for the last 100 days -- 823/93 = 8.85

Summary and investing strategy -- The market performed well last week and seems to have support across the board. I'll stay fully invested but still trim any stock not maintaining a price above its 50-day moving average. January is usually a strong month, so I feel that I can safely replace any stock I cull. Have a great week and a prosperous New Year.

 

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

 

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