Chart of the Day: Line Go Up

There's no real magic behind the 200 day moving average. You can choose the 201 day or the 199 day and you'll get similar data.

But for me, it's simple: If a stock is above its 200 day, then it's probably not in a downtrend. If a stock is below its 200 day, then it's probably not in an uptrend.

That's really how I use it.

And to be clear, never in isolation.

This is a weight-of-the-evidence approach, and this is just one more piece suggesting that we should continue to be spending more time looking for stocks to buy, than looking for stocks to sell.

This is the approach we've been taking and it's been incredibly rewarding.

First it was just Energy.

Then Energy and Healthcare.

Now it's Energy, Healthcare, Financials, Industrials and Materials.

The list of stocks in uptrends is getting longer, not shorter.

The list of stocks making new lows is almost non-existent at this point. In bear markets, that is not what you see.

I anchored this chart above to June 16th, which was the day that the New 52-week lows list peaked on the NYSE.

That was 5 months ago.

You can fight this trend if you want.

We chose not to.

- JC

Live Conference Call

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