Is the Rally Over? Is the Sky Falling?
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Today instead of featuring just one stock I'd like to look at the Market or really the TWO MARKETS. One is a Cap Weighted Market which I'll use the S&P 500 Index $SPX as an example and the other is the Equal Weighted Market and I'll use the Value Line Arithmetic Index $VLA as the other example.
As we look at the difference in the two charts we see that the Cap Weighted Index has taken a plateau or pause while the Equal Weighted Index has actually gone down and broken through its Trend Seeker .
What's the message? Don't panic if you see the heat maps on TV and think we are entering a recession. My message to you Long-Term Investors - Don't Panic - Make a weekly chart like this and let the Weekly Trend Seeker be your Alert and the Week Moving Average be your Hard Stop
First the charts, I'm going to use weekly charts showing Price, Weekly Trend Seeker and the 50 Week Moving Averages:
S&P Index Price, Weekly Trend Seeker & 50 Week Moving Average:
Value Line Arithmetic Index Price, Weekly Trend Seeker, & Week Moving Average:
On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.