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.

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