SmarTrend Performance Statistics for Dec 7
The number of total trends that are in Uptrends moved higher last week to 62%, above 60% for the first time since late October. The number of Uptrends that are in-the-money (trading above the Uptrend alert price) also shot up to nearly 80%, from just under 67% a week ago. Despite fewer total stocks in our Downtrend universe, these generally weaker stocks continue to weaken as the average Downtrend is now down 7.0%, vs. only 6.5% last week. These trends are consistent with the markets reaching new highs for the year last week, despite reversing mid-morning on Friday after a better-than-expected employment report. This choppy trade is typical for early December as investors set up their portfolio for year-end by creating losses in weaker holdings to offset gains in their winners. Despite this divergence between good and bad performing issues, for the market to get through its 1110 resistance (on the S&P 500), we will need to see participation by a broader universe of stocks. This will become evident when the number of Uptrends (as a percentage of all trends) gets close to historical statistical highs of 80%. While we moved in the right direction last week, the market still has some work to do in that regard. Our current forecast, as predicted in our Morning Call newsletter, is for a year-end rally to take place. Check the Morning Call each day as we may update our forecast in accordance with the direction of our highly accurate, proprietary indicators.
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