Health of Stock Market for week 6 of 2012

by GoodTrader

Short Term Trend: The last signal is Bullish from 20 of December 2011. Since then, the Russell 2000 is up 12.58% and the Nasdaq 100 has risen by 10.83%. Every minor dip is followed by more buying in the market, this is the really essence of a bull market.

Health of the Stock Market: This weekly indicator now has a value of 83.33%, better than last week. It is considered that the stock market is in good health when the indicator is above 70%.

Market Risk: This monthly indicator has been confirmed green in february. Low Risk in the market actually. The last change occurred in January 2012 after seven months in red. When the Market Risk is red, you have to be careful and reduce exposure to the equity market.

This week the volatility index (VIX) has continued to fall, which has supported the up trend in the stock market. Therefore the VIX remains in safe area, away from the critical levels of risk.

The Nasdaq100 and the Russell 2000 Small Cap Index have closed in the highs of the week. At this moment there is nothing that indicates a trend reversal to the downside.

Sectors: This week the bullish power was focused in Homebuilders, Financial Services, Regional Banking, Small Caps, Emerging Markets and Biotech.

Happy trading to everyone!