At the end of each week on my blog Financial Tides I like to analyze what the market did by using several ways to evaluate the trend. There is some tracking error in each method which is why I like to use several and then compare the results of each to get a consensus. I use BarChart to get all my data.
Value Line Index - This is an arithmetic index of 1700 stocks followed by Value Line. I like an arithmetic index because it duplicates the way most individuals purchase stocks. You buy 10 or 20 stocks with equal dollar amounts of each. Professionals and mutual funds might weight by market cap but most individuals don't.
- This week BarChart used 12 technical indicators and the VLA was a BUY in 12 of 13 indicators with only one HOLD
- The Index was tracking above its 20, 50 and 100 Day Moving Average (DMA)
BarChart Market Momentum - This week BarChart followed 6000+ stocks and determined how many traded above their Daily Moving Average (DMA)
- 85% above the 20 DMA
- 87% above the 50 DMA
- 90% above the 100 DMA
This is very positive and was above the percentages for last week and last month.
BarChart New High/ New Low ratios - I take how many stocks hit new highs vs new lows for various time periods. A number 1.0 or greater shows an upward trend.
- 20 day H/L ratio - 1635/204 = 8.0
- 65 day H/L ratio - 1167/50 = 23.3
- 100 day H/L ratio - 1047/35 = 29.9
Clearly there are many more stock hitting new highs than new low so that is a very positive sign.
Summary: All my indicators are in the same direction - UP. The Stock Market appears to be having a short, mid and long term trends all in the same upward direction - I call a CODE GREEN and would continue to BUY into this market.
I'd like some feedback to find out is this analysis is helpful to you. Please feel free to make comments below.