Read the recent article about Caliber and Affinity in Modern Trader magazine.
ALERT: The correlation between returns and affinity continued in negative territory last week suggesting that this market continues to be difficult to navigate. See the second graph below.
NYSE Update For The Week Of April 24th 2017
The 60-day Caliber fell from 865 to 830 last week so the diversity of this market has deteriorated. The number 830 means that over the last 60 trading days the NYSE behaved as if it was made up of 830 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 continued in negative territory this last week which means this market continues to be difficult to navigate. 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.