About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, March 12, 2010

Stock Market Comment

Mid and smaller cap. stocks have been the way to play the US
market for a good decade now. Recently, the NYSE adv. / dec.
line hit a new all time high. With over 3,000 issues on the big
board, the NYSE is primarily a small / midcap exchange. So too
the 1700+ issues Value Line index. The equal dollar weighted
version of the index is now trading only about 4% below the
2007 all time high.

The Value Line Arithmetic or equal weighted index has been my
favorite for over 20 years now, and the Value Line research has
provided me with more stock ideas than just about any other
product. The Value Line Arithmetic is found as either $VLE or
^VAY.

The $VLE has been the market leader in this cyclical advance.
In the last couple of weeks, there has been something of a mini
blow-off in the smaller guys, and the $VLE is now getting
overbought on a relative strength basis to the SP 500.

Interesting relative strength chart here.

1 comment:

Chris said...

Hello Peter,
I'm somewhat familiar with the value line index. I know Buffett has mentioned before that he also has found many of the stocks he buys are from value line. I also was an active KCBOT hard red winter wheat trader and always noticed the only other product they offered what the Value Line futures. Volume was always an issue for me so I've never traded it. Since reading your post, I've searched for a way to trade the Equal Weighted Value Line Index and have yet to find that vehicle. Could you lead me in the right direction? Would the VALSX work? Thanks in advance,Chris