The Average Investor's Blog

A software developer view on the markets

The Weekly Update

Posted by The Average Investor on Oct 24, 2010

The beginning of the week was scaring. On Tuesday all major indexes lost more than 1.5%. By the end of the week the US indexes have recovered all the loses and some more. The emerging markets were down. The biggest winner was the US REIT ETF. Here is the state of the positions we follow:

Asset Symbol Position Date In Gain
Nasdaq 100 ^NDX Long 2010-09-03 12.51%
Emerging Markets EEM Long 2010-07-23 11.86%
US REIT VNQ Long 2010-07-23 11.27%
S&P 500 ^GSPC Long 2010-09-30 3.67%

The last closing price of all the positions is well above the corresponding moving average, thus, the likelihood of triggering a sell is very low. For instance, the current 20-week EMA for the Nasdaq 100 is at 8.54% above it’s EMA, which, according to another recent post of mine, means that the index needs to shed more than 8.54% in a week in order to trigger a sell signal at the end of the next week.

Certainly according to the position of the indexes with respect to their EMAs continues indicate a severely overbought market.


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