Saturday, August 1, 2009

BarChart Stock Market Momentum W/E 7/31/2009 CODE GREEN

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

BarChart Graph

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!

BarChart High/Low page

It would appear that the Market is in a strong upward trend and I'm fully invested Long in the Market.

Monday, July 27, 2009

Stock Market Momentum W/E July 24, 2009 Code GREEN

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.