Skip to main content

Not dead yet

I've been on the road this weekend, bringing my sons to visit their grand-dad and celebrate his 89th birthday. As a result, posting has been slim over the last few days but I wanted to provide these charts for your consideration as an alternative to the pervasive bearishness that has been out there lately

In the chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 6400 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).


This chart shows that the market took a body blow last week but is still standing. Last week I wrote that the market was surely going to move up based on the pattern emerging on this chart where the yellow line (number of stocks above their 50-DMA) had moved decisively above the magenta line (number of stocks whose 20-DMA is above their 50-DMA). The yellow line has taken a step back but is still well above the magenta line. Furthermore, the magenta line has held in place. This, to me, suggests there is still some underlying strength in this market.

The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.


Last week's action essentially stopped this chart in its tracks. Whereas the previous weeks had seen some very nice improvements in the number of stocks that were showing strong up-trends, this past week showed a slight decline. The good news, however, is that the decline was merely slight despite the fact that stocks had a pretty rough week with most averages falling more than 3%.

Conclusion --

This coming week, stocks will be hostage to employment reports. Wednesday comes the ADP employment report, Thursday is initial claims and Friday the big Nonfarm Payrolls report. Expectations are low for all of these reports so any glimmer of hope related to jobs could serve to further strengthen support for stocks.

Technically speaking, stocks stubbornly keep from establishing new lows while cycling above and below the 200-day moving averages. It makes this market a nail-biter. Nevertheless, I can't quite embrace the bear case. I would not be surprised by a  move to the upside.

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.