- Down to an 8% technical buy signal.
- Down 6.42% in the last month.
- 7.84% off it's previous high.
- Trend Spotter Sell Signal.
The Barchart Chart of the Day belongs to the Value Line Arithmetic Index ($VLA). This is an arithmetic index of the 1700 largest companies that is equal weighted (these 1700 stock are about 95% of the entire capitalization of the US stock market). Most of the other indexes are Market Cap weighted so larger companies skew the results.
This is a chart of the Value Line Arithmetic Index vs the Trend Spotter and the 20, 50, 100 and 200 day moving averages:
As you can see the Market has been pretty much flat for the last 6 months but has now traded below its 200 day moving average. For most EFTs the 200 day moving average is my stop loss and I wait until I see some upside to reinvest the proceeds from what I sold.
The next chart is the Value Line Arithmetic Index 90 day Turtle Channel including the Trend Spotter, 100 and 200 day moving averages.
My opinion from reading these 2 charts is that this is a moment of caution not a moment to panic. I'm personally keeping my moving stop losses in place - the 200 Day Moving Averages on broad based ETFs and the 100 day moving averages on individual stocks. At the same time I will be selling any position that has a negative 3 month performance. If something hasn't gone up in the last 3 months: why should I own it?
Please let your decisions be made on rational review of each position in your portfolio and not by any emotional panic you get from reading the media headlines.
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