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Sunday August 29, 2010
The Markets Last Week
!
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Closing prices week ending (8/27/10)
vs week ending (8/20/10)
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The DOW 30 has fell back under the 10,000 level for a day after trading over
it for 36 straight trading days
Eight indices closed the week with more than a 10% loss to the 52 week
high --- the definition of a correction!
The
DOW 30
(10,150.65),
closed off - 62.97 (- 0.62%) on the
week, making the index off - 217.40 (-
2.66%)
on the year. The 52 week high is 11,204.28,
set on 4/23/2010. The index has remained out of bear territory for the
55 weeks, after being there for 44 weeks, and back out of correction
territory for week 8, after being in it 1 week.
.
The
"all-time" high is 14,164.53, set on 10/9/07. The 52 low is 9280.67, set on 9/2/09.
The
Nasdaq
(2,153.63)
finished the week off - 26.13 (- 1.20%) ,
making it off - 115.52 (- 5.09%) on the year. The 52 week high is 2,530.15, set on 4/23/10.
The "all-time" high is 5048.62, set on 3/10/2000. The 52 week low is 1967.07, set on 9/2/09.
The
SPREAD (1,667.81) finished the week off - 0.86 (- 0.05%) , making it up + 66.89 (+ 4.18%) on the year. The "all-time"
high of 1977.02
set on 4/23/2010. The 52 week low is 1368.68, set on 9/2/09.
The SPREAD is the difference between the close on
the NY and the close on the VL.
Both are basically the same market, with the only exception
being about 250
OTC stocks in the VL (the rest, over 1500, are NY listed).
It tells us how the two separate markets are currently acting
with the VL leaning slightly to the OTC market.
The graph below shows the closing indices on (9/21/01), the end of the
first full week of trading after the Attack on America.
The
week ended with 10
indices trading higher than on 9/21/2001, versus 10 two weeks ago and 10 three week ago.
The below table shows the 52 week low, when it expired,
the point difference
and the % over that low at the closing price on the week.
There are 6
indices with
less than 10% to fall from the 52 week low this past week (more bearish)
The
above table shows 0
indices with more than 30% to fall, before breaking the 52 week low, versus 0 two weeks ago and 0 three week ago (more bearish ).
The below figures are % change from closing
year-end indices for 2009
and cover this past week versus the week before.
There
are 3 indices
finishing in positive territory "year-to-date" this past week versus 3 the
week before and 3 three weeks ago. The NY index is off -
(5.43%)
. with a difference of off - (0.25%)
. on the week, while the VL is up (+1.33%), a difference of off - (0.11%)
.
This tells us
the big OTC stocks outperformed the blue chips for the
2nd week, after stronger blue chips for 3 weeks, after stronger OTC stocks for 1
week (more bullish).
The
difference between these two indices is the SPREAD. The SPREAD climbs
when the VL is climbing faster than the NY, and falls when the VL falls faster than the NY. The VL tends to lean
more toward the direction of the Nasdaq index, or we should say, the big OTC stocks.
The markets tend to climb when the
VL beats the NY, meaning the current stronger VL would
>
be considered near term bullish. Also, the three indices in positive territory all
>
lean toward the OTC stocks. Another bullish sign for the near term.
The SPREAD
is "unique"
to the Stocks in the Spotlight since we designed it in 1990 by producing an "equal weighted value equation"
allowing a better view of the longer term markets when comparing the big OTC stocks to the New York Exchange listed
stocks. The SPREAD has been adjusted for the big change of the New York index at the beginning of 2004.
The OTC stocks carried in the VL (the only part of the "SPREAD (NY vs VL)" with
OTC stocks in it) are only a couple of hundred of the top OTC stocks, because the majority
of the stocks in the VL are NY listed, and none are smaller caps. This means when the VL
performs better than the NY it shows more buying in the top OTC stocks, or vice versa.
The below figures are the discount to the 52 week
high and cover this past week versus the week before.
Ten of the 11 indices set a new 52 week highs 18 weeks
ago, but all failed to reach a new one since. Eight of the indices closed the week off
more than 10%, vs 8 the week before, a definition of a correction.
The SPREAD & VL
reached a new "all-time" 18 weeks ago,
which appears to have been a sign of the market top because it can't seem to get
back to the level since. Both indices are currently over a -14% from the 52 week high, with the SPREAD
off over -15%
, a correction.
There are 8 indices with a "double
digit" percentage discount to the 52 week high (a
definition of a correction) vs 8 the previous week and 8 the week before. There are 0 indices in bear market territory (a discount to the 52 week high over 20 percent)
vs 0 last week
and 0 the week
before.
When we look
at the indices compared to the 52 week high, we get a look at the shorter picture. However, the discount to the
"all-time high"
(below) will continue to show the results of the longer term market.
More
than a 10
percent discount to the 52 week high is "one" definition of a correction.
More
than a 20
percent discount to the 52 week high is "one" definition of a bear market.
The below figures are the discount to the all-time high
compared to this past weeks close.
More than a 20 percent discount to the all-time high is another definition of a bear market.
Using this definition,
there are currently 9 indices in bear market territory compared to 9 two weeks ago and 9 three weeks ago.
Use caution, continue to look to the small stocks and buy the
bargains!
Be sure to visit "The Current Market"
for comments about the
current market and what to look for this coming week.
Clicking on "The Current Market" will take you there!
Be sure to visit "Monthly Gains & Losses"
for a look at the
past "monthly" performance on the indices going back to 1994.
Clicking on the "Index Gains & Losses" will take you there!
Be sure to visit our "Spotlight Futures" for a look at
metals, oil and currency futures updated weekly.
Clicking on the "Spotlight
Futures" will take you there!
Be sure to visit our weekly "Stocks to Watch" section
for brief news headlines and updated buy, sell, hold
opinions on several Spotlight favorites from the past.
Clicking on the "Stocks To Watch"
will take you there!
"If in the right stock, at the right price,
the market direction will mean little!"
There is still many
negatives in the economy, and the markets, so continue to use caution and stick with value stocks for safety. Choose wisely!
I am J.R. Budke and this is my opinion!
| The recommendations and updates in this week ahead may include "forward-
looking" statements as that term is defined in the Private Security Reform Act of 1995, & therefore are
subject to various risks & uncertainties. There can be no assurance that actual results, business conditions,
business developments, losses & contingencies, and local & foreign factors will not differ materially from
those suggested in the "forward-looking" statements as a result of various factors, including market
conditions, competition, advances in technology, acquisitions, potential litigation, personnel changes, capital
availability, and all sorts of other factors. Do not make investments based on the material provided in this article.
Investors should not make decisions based on any of the material featured here without first consulting with their
brokers and/or financial advisors. |
J.R. Budke was a stock broker from 1981 to 2000, an options principle
since 1982 and a branch office manager since 1987. JR became inactive as a stockbroker on 12/31/99. J.R. writes
most of the articles and opinions for the Stocks in the Spotlight. The
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