Value Line Index -- Contains 1700 stocks so its much broader than the S&P 500 or very narrow Dow 30 -- I think it's much more representative of the real market action -- Down but not out
- Down 3.57% for the week but still up .39% for the last 20 sessions
- 64% Barchart technical sell signal
- Trading below it's 20, 50 & 100 day moving average
Barchart Market Momentum -- contains 6000 stocks -- Percentage of stocks closing above their Daily Moving Averages for various time frames -- Above 50% is good -- Short term upward bias
- 20 DMA -- 54% closed above on Friday -- 76.55% closed above last week -- only 30.04% above last month
- 50 DMA -- only 36.00% closed above last Friday -- only 40.88 closed above last week - only 27.14% closed above last month
- 100 DMA -- only 41.98% closed above last Friday -- 51.47% closed above last week -- only 46.33% closed above last month
Ratio of stocks hitting new highs/new lows for various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- We have all 3 time periods bearish
- 1 month ratio new highs/new lows -- 664/775 = .86
- 3 month ratio new highs/new lows -- 243/519 = .47
- 6 month ratio new highs/new lows -- 206/337 = .61
Summary and investment strategy -- Although the market ended on an upbeat note on Friday don't get suckered into thinking we are in a market recovery until you see better confirmation of an upward trend. My major indicator is the Barchart Market Momentum. I look to see if 50% of their stocks closed above their Daily Moving Average. 50% above the 20DMA -- On your mark. 50% above the 50 DMA -- Get set. 50% above all 3 -- GO!. I'm waiting and watching for that.
Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: No individual stocks mentioned