At the end of each week I look to BarChart to test the Tides and see which way the Tide is flowing. This week the tides seems to be flowing in an rising trend so there is still a CODE GREEN meaning that it looks like a good time to be in the Stock Market.
Let's take the 3 indicators I follow and see what they say;
Value Line Index - This is an arithmetic index of the 1700 largest stock followed by Value Line. These 1700 stock make up over 95% of entire US stock market capitalization.
BarChart's Opinion is very postive on the Index and gives it a 96% Buy signal
Is the Index trending above it's Daily Moving Averages:
1.20 DMA Above
2.50 DMA Above
3.100 DMA Above
All 3 look good
Next I check the BarChart Market Momentum page to see how many stocks are trading above their Daily Moving Average:
1.20 DMA - 66% are trading above
2.50 DMA - 83% are trading above
3.100 DMA - 87% are tradign above
This is a very good sign
Next I see that the ratio of stocks trading at new highs to new low for 3 time periods:
1.20 day - 1200 highs/316 lows = 3.8 positive ratio
2.65 day - 980 highs/111 lows = 8.83 positve ratio
3.100 day - 916 highs/72 lows = 12.72 positive ratio
All 3 periods have many more new highs than new lows - a very positive sign
Since there don't appear to be any mixed signals in my 3 indicators I'm going to continue my CODE GREEN; It's OK to invest in the market and stay fully invested in your 401K
Comments: View Comments | Sunday August 30, 2009
This week the Market Momentum indicators I follow on BarChart give me a Code Green. Let's go over what the codes mean (I'm not trying to take anything away from HomeLand Security).
I am not trying to predict which way the market is headed, I have no crystal ball. I'm just observing the way it is presently trending. The title of my blog is Financial Tides and just like you want to know High Tide, Ebb Tide and Low Tide when you go through an inlet you should know that when your investing also. Never try to swim against the tide.
A Code Green just means the all the indicators observe that the market is in an upward trend, Code Yellow is a confused or neutral trend and Code Red means the market has been trending down.
I try to be long when it's Green, cautious when it's Yellow and short or in cash when it's Red. Observe it, but don't try to outsmart it.
Let's take the BarChart indicators one at a time:
The Value Line index - approximately 1700 stocks. Is the index above or below it's Daily Moving Averages?
1. 20 DMA - ABOVE
2. 50 DMA - ABOVE
3. 100 DMA - ABOVE
This looks very good and appears BULLISH
BarChart Market Momentum - approximately 5900 stocks. What percentage of all these stocks are trading above or below their Daily Moving Averages?
1. 20 DMA - 87% are trading ABOVE their DMA
2. 50 DMA - 86% are trading ABOVE their DMA
3. 100 DMA - 90% are trading ABOVE their DMA
This is also very good and appears BULLISH
BarChart New High to New Low Ratios - number of stock hitting new highs or lows varies
1. 20 Day new High/Low ratio - 1986/185 = 11 to 1
2. 65 Day new High/Low ratio - 1246/84 = 15 to 1
3. 100 Day new High/Low ratio - 1193/52 = 23 to 1
The are a much greater number of stocks hitting new Highs than stocks hitting new Lows - very BULLISH!
It would appear that the Market is in a strong upward trend and I'm fully invested Long in the Market.
Comments: View Comments | Saturday August 1, 2009
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