Hello,
The S&P 500 Index finished the week with a gain or 0.67% with the three best performing sectors being utilities, real estate and health care. Year-to-date the Index has gained 5.74% with the leading sectors being technology, health care and consumer staples.
With this nice upward run Old_Skeet's market barometer has the Index scored in overbought territory with a reading of 131. A lower reading from its neutral position of 150 indicates there is less value to be had as the measure drops while a higher measure indicates there is more value. With this relative low value reading Old_Skeet is not a current buyer in equities while I am not presently selling either due to a seasonal investment strategy that I follow. In the fall, I generally load equities and by late spring I'll generally have reduced my allocation to equities. I use the barometer as an aid to assist me in when to load equities in the fall and when to reduce my equity allocation come spring. According to the barometer and my equity weighting matrix I am currently overweight equities by 7% to 8% at this time. As long as the barometer keeps falling this means the Index's price valuation is moving upwards and less nearterm value is to be had. Once, I begin to see a rise in the barometer reading I'll start to reduce my allocation in equities as most likely the Index will have reached a nearterm peak. However, for now I'm riding this equity train as long as it will climb the mountain.
In review, the feeds that make up the barometer are a breath reading consisting of the number of stocks percent wise above the 200 day moving average line, a second feed that combines the past twelve months of reported earnings along with forward estimates plus a third feed that provides a technical score that is comprised of both the relative strength indicator and money flow indicator. How I scale all of this into a barometer reading will have to remain unknown.
Thanks for reading ... and, I'll let you know when I begin to lighten the equity load.
Have a good weekend ... and, most of all I wish all "Good Investing."
Old_Skeet
