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The SPREAD is
off 15.68 % from the 52 week high, and deep in correction territory
for week 8
The definition of a correction is more than a 10% loss to the 52 week high
The SPREAD
closed Friday, 8/27/10, at 1666.95, off -
0.86 (-0.05%) this past week vs up +8.70,
or (0.52%) the previous
week.
The 52 week
& all-time closing high is 1977.02 reached on 4/23/10. The
52 week low is is 1368.68, set on 9/2/09.
We
are watching the VL and
the NY trying to turn down, a bearish sign for the near term. If the VL falls under the line we
might expect a bigger fall in the near term markets. When we see the VL
climbing faster than the NY, we would expect
the rally to continue, however, when we see the VL fall faster than the
NY, the markets become bearish.
The
distance between the two (spread) continues to grow, if the VL is climbing faster than the NY, or shrink, if the
VL is falling faster than the NY.
Since
the big OTC stocks are part of the VL index, when the big OTC stocks fall, the VL falls. If the VL is losing ground
faster than the NY, it means the big OTC stocks are selling more than the NY stocks. If the VL is climbing faster
than the NY, it would mean more buying in the OTC stocks. The SPREAD climbs when the VL is stronger and falls when
the VL is weaker. A great way of knowing what side of the market is doing the best.
Closing off -
0.86 (-0.05%)
, on the week, makes the broad index up +
66.89,
or (+ 4.18%), on the year. The SPREAD closed up
(+ 6.64%),
year-end 2005, up + (14.04%), year-end 2006, off
(- 2.08%), year-end 2007, off - (34.52%), year-end 2008 and up
(+ 81.74%),
year-end 2009.
The 30 day trend turned bearish 2 weeks ago, after staying
bullish for 5 weeks,after remaining bearish for 4 weeks. The 90 day trend turned bearish 12 weeks ago, after staying bullish for 24 weeks, after staying bearish for 3 weeks. The 180 day trend turned bearish 3 weeks ago, after
staying bullish for 68 weeks, after staying bearish for 28 weeks . The 1 year trend turned bullish 52 weeks ago, after staying bearish for 85 weeks, after being bullish for 228 weeks.
The
SPREAD is unique to the Stocks in the Spotlight since we designed it in 1090 by producing an "equal 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 covers such a broad market that it offers a look at the "big" picture. The idea behind the SPREAD
is that if we see the New York (NY) index rising faster than the Value Line (VL) we know that the stocks traded
on the NY are getting more activity but stocks on the Over-The-Counter (OTC) are not getting as much interest.
The
reason for this action is because none of the large OTC stocks trade on the NY. No matter how many shares of Microsoft
trade, or how many dollars it may change, it will not show up on the NY. Companies such as DELL, Yahoo!, Liz Claiborne,
are just a few of the (OTC) stocks not on the NY. Therefore, if the VL rises faster than the NY we know the buying
is coming into the big OTC stocks and if we see the VL fall faster we know there is greater selling in the big
(OTC) stocks.
We
end up with a theory:
The MARKETS are not able to move very
far, in either direction, without the SPREAD!
The SPREAD tells us the "real game" the whole market is playing.
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