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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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Marketocracy capital management
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  • Market has no clear direction 0 comments
    Oct 3, 2009 12:14 PM
    This week, in fact the last 2 weeks have not been that great. The market as measured by the Value Line Index, an index of 1700 stocks was down 2 weeks in a row about 5.8%. Not the 10% retracement some predicted but still cause for some concern. None of the stocks I hold in the Wall Street Survivor portfolio have gone down to the 50 Day Moving Average but some are approaching my sell signal. More on that later.

    Let's look at the way I view that market:
    Vaule Line Index -- 1700 stock followed by Value Line:
    1. BarChart still has a BUY signal of 8% as an overall average but the 5 short term indicators have a 40% sell. Overall there are 5 BUYs, 4 Holds and 4 Sells. Only 5 of the 13 indicators are BUY and since the short term indicators average SELL, I'll be culling at the 50 DMA and not replacing till the market gives a better sense of direction.
    2. The VLA is below its 20 DMA but still above its 50 & 100 DMA

    BarChart Market Momentum - Of the 6000 stocks BarChart follows how many are trading above their Daily Moving Averages for various periods?
    1. 20 DMA -- 65% are trading below
    2. 50 DMA -- 63% are trading above
    3. 100 DMA -- 81% are trading above

    The ratio of new highs to new lows for various periods -- 1 is neutral, above 1.01 bullish below .99 bearish.

    1. 20 day new/high ratio -- 319/1916 = .17 (bearish)
    2. 65 day new/high ratio -- 223/220 = 1.01 (neutral)
    3. 100 day new/high ratio -- 203/135 = 1.50 (bullish)

    My recommendation: The market does not have a clear trend, now is the time to review each of your holdings individually and cull the ones you aren't feeling strong about. Don't commit to new positions until you get some clarity out of the market but have a list of stocks you'd like to buy on this dip so you can jump in when a bottom is reached.

    Back to the Wall Street Survivor portfolios for our Top Stock Bloggers. With just 2 days trading for the month the S&P 500 is down 3.01%, Anthony Mirhaydan our winner was up 5.76% and I brought up the rear down 7.87%. Maybe next week the market will be kinder to me.


    Jim Van Meerten is an investor and shares his investing opinions on Financial Tides, MSN Top Stock Blogs and Seeking Alpha.

    Disclosure: I do not hold positions in stock mentioned in my blogs but I hold them in the Wall Street Survivor portfolio for accountability of my recommendations.

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