Introducing the "Allstarcharts USA Next 50 Index"
Here is what that USA Next 50 Index looks like today. I see it hitting a key Fibonacci extension target in July, retesting that successfully in early November, and now breaking out to new all-time highs. The target I see for this index is still another 15-17% higher. That's not nothing:
How does this help us? Well, one of the most valuable parts of my process includes going through all 30 stocks in the Dow Jones Industrial Average on both weekly and daily timeframes to get a longer-term view of the 30 names as well as a more short-term outlook for what are theoretically the most important 30 companies in America. (You can read more about that process here) I also perform the same exercise on a weekly basis for the 20 stocks in the Dow Jones Transportation Average.
So now that we have the USA Next 50 Index, we have another 30 stocks to look at for the Industrials and another 20 in the Transports. We have more evidence to weigh and more data points to help us formulate a thesis. I took the largest 30 stocks by market capitalization that are not part of the DJIA and did the same for the largest 20 Transportation stocks not in the DJTA. Here is my list:
This serves two purposes - first we have additional data points in our weight-of-the-evidence approach. And we also have 3 more indexes to review throughout our process: The Next 30 Industrials, the Next 20 Transports, and the Next 50 Total Index, as seen above. Note - these indexes are equally-weighted, as opposed to the price-weighted format for the traditional Dow Jones Averages. So if you don't agree with one or two of my components, the difference in the performance of these indexes is minimal.
I'm not sure why no one else has thought about this. I'm already finding it helpful. From a risk management standpoint, as long as the USA Next 50 Index is above the July highs, I think we need to continue to err on the very aggressively bullish side of the US equities market.
Members of Allstarcharts will have access to all 3 of these indexes on multiple timeframes as well as the 50 new components annotated with comments updated on a weekly basis.
If you're not already a member of Allstarcharts, prices are about to go up permanently due to our growth and increased data & research. I encourage you to start a 30-day risk Free trial (and 50% discount) and see if it's for you.
Cheers,
JC
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