NYSE Weekly Update

June 26th, 2016

The Caliber of the NYSE fell last week from 743 to 675. This number means that over the last 60 trading days the NYSE behaved as if it was made up of 675 completely independent stocks, once individual stock trends were removed. The current Caliber is greater than 84% of all Calibers over the last 25 years. Higher Calibers sometimes coincided with better market conditions in the past but this might not be the case in the future.

The Caliber calculated for each 60 day period over the past year.


The correlation between a stock's return and it's Affinity has been dropping over the last few weeks as the following graph shows. Since this correlation is falling, investors might want to look for stocks that have both lower Affinity rankings and lower risk. On the other hand, if this correlation was rising, investors could consider stocks with higher Affinity rankings. In general, the market appears to oscillate between favoring high or low Affinity stocks and the correlation tells you where the market is in that cycle. The overall market can rise or fall for any value of the correlation but the periods when the correlation is rising might be the easiest for investors to handle.

The correlation between stock returns and stock Affinities calculated for each 60 day period over the past year.


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