Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Stock Market Momentum W/E July 25, 2009

As always remember no investment is made in a vacuum. It is important to know what the overall market is doing before you make a new investment.

We will look at 3 different momentum indicators that can be found on BarChart.

The Value Line Index - an index of 1700 stocks

Is the Index trending above or below it's 20, 50 & 100 Daily Moving Average? - ALL above - Bullish indicator

  1. 20 DMA ABOVE
  2. 50 DMA ABOVE
  3. 100 DMA ABOVE

Overall Market Momentum - Are stocks trading above or below their DMA's? - covers approximately 5840 stocks - The majority are trading above their DMAs - Bullish indicator

  1. 88% are trading ABOVE their 20 DMA
  2. 85% are trading ABOVE their 50 DMA
  3. 91% are trading ABOVE their 100 DMA

What ratio of stocks are hitting new highs than new lows? For all 3 periods there are more new Highs than new Lows - Bullish indicator

  1. 20 day new high/low 2415/196 = 13 to 1
  2. 65 day new high/low 1388/95 = 15 to 1
  3. 100 day new high/low 1344/660 = 2 to 1
This week all 3 indicators appear to be BULLISH - Code Green means it is probably safe to make new additions to your portfolio.