Skip to main content

Weekly review - stocks hit the brakes

Major averages gave way this past week. Losses seemed rather modest but the underlying data is starting to look very suspicious. Yes, we had a big rally on Friday but our data shows a real slowdown in upward momentum.

We use both daily data and weekly data collected from the Alert HQ process to compile the market statistics discussed below. Each weekend we scan over 7200 stocks and ETFs looking for BUY and SELL signals. In the process, we collect various technical information that we roll up into charts like the ones below.

Stock Market Statistics based on Daily Data, 08-22-2008
The chart above is based on daily data. It clearly shows that many stocks have fallen below their 20-day and 50-day moving averages. It also shows that more than a thousand stocks are no longer exhibiting strong up-trends according to Aroon analysis. The number of stocks showing strong buying pressure according to Chaikin Money Flow analysis showed a small decline.

So is this merely a pause in a major up-trend? For the optimists, we can point to the fact that we don't have a big increase in stocks exhibiting strong down-trends according to Aroon. The number of stocks whose 20-day MA is above their 50-day MA actually showed a very slight increase.

Stock Market Statistics based on Weekly Data, 08-22-2008
In the chart above we show the results of analysis based on weekly data. As can be expected, the data on weekly charts is slower moving and smoother than what we see on the charts based on daily data. Nevertheless, the action in this past week did show a similar slowing of momentum. Analogous to what we saw in the first chart, we have a decrease in the number of stocks trading above their 20-week and 50-week moving averages. In addition, we see the number of stocks exhibiting strong up-trends according to Aroon analysis has failed to show any increase.

In summary --

Our data has shown market internals improving for some time now but this past week it looks like someone hit the brakes. The number of stocks exhibiting bullish technical characteristics showed a noticeable decrease.

Nothing goes up in a straight line so it's possible that last week was just a detour on the way to a stronger market recovery. On the other hand, there are strong signs that stocks have reached an intermediate high.

This past week was light on data and light on volume. This week we have plenty of potentially market-moving data on tap. We will see existing home sales and new home sales, the revised 2nd quarter GDP, durable goods orders, Chicago PMI, University of Michigan consumer sentiment and the weekly numbers on initial claims and crude inventories. All this during a pre-holiday week that typically exhibits low volume.

The combination of low volume, lots of data and slowing momentum could make this a wild week for investors. This might be a good time to pull over to the side of the road and let the more venturesome drivers pass.


Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:

Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:

Results here were actually quite good and, to make things even better, the previous month was revised upward.