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Earnings finally matter -- and the market recovers

Having spent the day working on renovating a bathroom I confess I don't have the energy to get too deeply into another post tonight. Still, I wanted to share the the weekly charts from Alert HQ.

The view from Alert HQ --

The data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6040 stocks and ETFs each weekend and gather the statistics presented below.

In this first chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We then plot the results against a chart of the SPDR S&P 500 ETF (SPY).


Last week I opined that this chart looked "bottomish." After this week's strong performance (major indexes gained more than 3% and the Russell 2000 gained 6.6%) this chart is now looking downright bullish. Do you realize that we now have roughly 50% of stocks above their 50-day moving average? That's the best level we've seen in the last two months.

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. 


Since this chart is based on Aroon analysis and Aroon is a more slow moving indicator, the results are not quite as dramatic as in the first chart. Still, improvement is clearly visible as the number of stocks in up-trends is definitely increasing.

Finally, if you haven't been browsing through the signals at Alert HQ, I would encourage you to take a look. We identified a ton of BUY signals this weekend and they are a confirmation of the strength that is returning to the market.

It looks like it's safe to be long again. But for how long?

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