Markets by relative strength

I posted this same ranking about 10 days ago. Japan continues to lead the momentum ranking, while Gold maintains its place dead last. US market averages, in general, moved up.  Bonds, with their low volatility, usually don’t rank high on momentum listings, but the positioning can be helpful in determining which group of bond funds is stronger at the moment. Here’s my ranking as of the May 7 close:

                             Markets by Relative Strength

1.  Japanese equities                                               10.  International equities
2.  Nasdaq 100 index                                              11.  Dow Industrial Average
3.  Nasdaq Composite index                                  12.  Asian equities
4.  S&P 400 index                                                    13.  US high yield bond
5.  Russell 2000 index                                            14.  Latin American equities
6.  European equities                                              15.  US municipal bond
7.  US equities                                                           16.  International bond
8.  Wilshire 5000 index                                          17.  US bond
9.  S&P 500 index                                                    18.  Gold

Each day that Wall Street is open for business I monitor benchmarks for 18 different markets to gauge relative strength. The results help me to identify regions of the world or categories of US stocks currently exhibiting positive momentum. The ranking is derived by applying a proprietary formula which incorporates performance over a variety of time periods, with more weight given to recent price activity. This is just one of many filters I use in determining newsletter model portfolio and managed account client recommendations.

Markets by relative strength

Each day that Wall Street is open for business I monitor benchmarks for 18 different markets to gauge relative strength. The results help me to identify regions of the world or categories of US stocks currently exhibiting positive momentum. The ranking is derived by applying a proprietary formula which incorporates performance over a variety of time periods, with more weight given to recent price activity. This is just one of many filters I use in determining newsletter model portfolio and managed account client recommendations. The list looks like this as of Friday’s close:

                             Markets by Relative Strength

1.  Japanese equities                                               10.  S&P 400
2.  European equities                                              11.  Nasdaq 100 Index
3.  Asian equities                                                      12.  US High Yield Bond
4.  S&P 500 Index                                                    13.  Russell 2000 Index
5.  International equities                                        14.  International Bond
6.  US equities                                                           15.  US Municipal Bond
7.  Wilshire 5000 Index                                          16.  US Bond
8.  Dow Industrial Average                                    17.  Latin American equities
9.  Nasdaq Composite Index                                  18.  Gold

Changing of the guard?

The small-cap Russell 2000 Index lost ground Monday and Tuesday, while the large-cap Dow Industrial Average and S&P 500 Index notched fresh highs. Two days don’t make a trend, but I’m keeping a close eye on this price action.

Continued weakness in the Russell 2000 could be signaling a flight-to-quality by traders unnerved by Cyprus’ financial crisis and North Korea’s saber-rattling. Or it might indicate this four-year old bull market is aging – historically small-caps lead the charge out of recession and as the economy improves, large-caps assume the leadership role.

For now, my Russell 2000 reading: Bull market.

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Please note that my readings will change without notice,  so please don’t buy or sell solely based on anything you read in this blog.