Things look good, maybe too good. When I look at Vanguard's Total Market ETF (VTI) I like the fact that the fund has returned to trading above all its daily moving averages:
At the same time I'm happy that Barchart's Market Performance Indicator showed that the majority of stocks are trading above all their daily moving averages:
Market Performance Indicator
Barchart Market Momentum Index ($BCMM) [-1.59%] is an exclusive index used as an indicator of change in overall markets. It reflects the movement of stocks who fit the following criteria: must have current SEC filings, must have traded for a minimum of 6-months, and must be trading above $2.
Market Average
The percentage of stocks in $BCMM above their individual Moving Average per period.
| 5-Day MA | 20-Day MA | 50-Day MA | 100-Day MA | 150-Day MA | 200-Day MA | |
|---|---|---|---|---|---|---|
| Today | 81.84% | 50.16% | 56.63% | 54.80% | 55.81% | 57.41% |
| Yesterday | 82.88% | 46.98% | 55.09% | 54.27% | 54.65% | 56.95% |
| Last Week | 63.85% | 27.90% | 44.59% | 46.18% | 47.41% | 51.90% |
| Last Month | 27.35% | 71.58% | 63.47% | 58.49% | 58.83% | 62.84% |
Please don't let the good news give you a false sense of security. Remember that the Market looked great on 7/16 then collapsed overnight from $278.21 to $251.00 without warning and really without good reason.
Please go back and relisten to the webinar John Rowland and I gave just a few weeks ago : Portfolio Risk Management Tools of the Trade
Have your stop losses in place and make sure you have your portfolio diversified. If that's not enough consider buying some puts on the positions that are bothering you. Mitigate your risk and don't be too cocky!
On the date of publication, Jim Van Meerten had a position in: VTI . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
