SmarTrend Performance and Statistics Update for Nov. 23
Last week's mixed market and choppy action is evident in the weekly statistics as the number of total Uptrends, as a percentage of all trends, ticked higher to nearly 60% from about 56%. However, the percentage of Uptrend that are in-the-money fell from 77% to 70%. This is due, in large part, to the rise in stocks early last week which later retraced toward the end of the week. The average length of an Uptrend shortened as did the average return. Conversely, the average length of a Downtrend increased. This is an indicator that investors are becoming more discriminatory when it comes to stock purchases and/or a re-positioning of portfolios into year end. Lagging stocks in Downtrends are staying there - albeit not declining with any speed as indicated by the relatively modest 5% average decline. All of this adds up to a market that is struggling to find direction near a key trading level. During the rally from March through August - all stocks moved up regardless of fundamentals as cash moved off the sidelines en masse. Investors are now looking for sector-specific performance and will reward those that meet expectations but quickly take profits in those companies which may be showing signs of hardship. That said, the increase in the number of Uptrends bodes well for the market in the near term. We will be closely watching these indicators, the number of Uptrends to Downtrends and report any new findings each day in our Morning Call report.
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