What a ying yang market

Every weekend on Financial Tides I try to give an objective summary of what happened in the stock market during the past week. This week we had a ying yang market but unfortunately there was more yang than ying so we are down for the second straight week. As measured by the Value Line Index of 1700 stocks we were down 6.26% this week and 1.74% last week with an October loss of 5.31%.

Let's see how the market did using my standard market momentum criteria as found on BarChart:

Value Line Index - an index of 1700 stocks - trending downward but not to panic yet.

• The Index was down 6.26% this week, down 1.74% last week and down 5.31% for the month.
• The Index is tracking below its 20 & 50 day moving average but above its 100 day moving average.
• The Index is off its market high on 10/19 by 9.13%

BarChart market momentum indicators - a review of approximately 6000 stocks - are they trading above or below their daily moving averages -- down but still above the 100 DMA

• 20 DMA - 85% trading below their DMA
• 50 DMA - 68% trading below their DMA
• 100DMA - 67% trading above their DMA

Ratio of new highs to new lows for various periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- we are bearish for all 3 periods

• 20 day new high/new low ratio -- 221/2265 = .10
• 65 day new high/ new low ratio -- 107/710 = .15
• 100 day new high/new low ratio -- 97/302 = .32

Summary -- We had a very bearish week and all my BarChart indicators show a very downward trend. Economists are saying the market is in recovery but we have had a 9.13% retraction of the stock market from our earlier high on 10/19. Many were expecting a 10% correction so I hope that is it. I'll be trimming my positions that fall below their 50 DMA but will not replace those positions until I see some market support.

On my Wall Street Survivor portfolio I have placed sell orders for ESC -- Emeritus and VRUS -- Pharmasset both trading below the 50 DMA. My portfolio in is dead last place in the competition. I purchased stocks that had a greater beta than the other players and the down market crushed me harder. Next month is another month.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please make a comment below or email FinancialTides@gmail.com

Disclosure: I do not hold positions in any of the stock mentioned in this blog at the time of publication