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 pockets of momentum. I posted this same ranking on May 8th and since then the Japan stock market has moved from the top spot all the way down to last place. The Nikkei 225, an index of the largest stocks traded on the Tokyo Exchange, turned on a dime May 22 and has lost 15% of its value in just 8 trading sessions. Of course, the Nikkei 225 was up 50% year-to-date before correcting. As the saying goes: the bigger the pop, the bigger the drop.
Markets by Relative Strength
1. Russell 2000 Index 10. International bonds
2. Nasdaq Composite Index 11. US bonds
3. Nasdaq 100 Index 12. International equities
4. Dow Industrial Average 13. US high yield bonds
5. S&P 500 Index 14. US municipal bonds
6. Wilshire 5000 Index 15. Gold
7. US equities 16. Asian equities
8. European equities 17. Latin American equities
9. S&P 400 Index 18. Japanese equities
My 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.
♦ Please note that my readings will change without notice, so please don’t buy or sell solely based on anything you read in this blog. ♦