Read the recent article about Caliber and Affinity in Modern Trader magazine.
NYSE Update For The Week Of January 16th 2017
The 60-day Caliber of the NYSE rose last week from 830 to 854. Caliber is near its historical high and may be about to drop which could be accompanied by deteriorating market conditions. The number 854 means that over the last 60 trading days the NYSE behaved as if it was made up of 854 completely independent stocks, after individual stock trends were removed. The current Caliber is at the 98th percentile of 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 correlation between a stock's return and it's Affinity rose significantly last week. When this correlation is rising, investors could consider stocks that have higher Affinity rankings. When this correlation is falling, investors might consider stocks with lower 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 this correlation but the periods when this correlation is rising might be the most comfortable for investors.