Month: December 2008

Worden T2108= 61%- highest since August 28; GMI: 2; GMI-R: 4

@ 12:01 am

The Worden T2108 Indicator is now at 61%, the highest reading since August 28.   This means that 61% of NYSE stocks closed above their 40 day moving averages.  This reading places this market pendulum close to the area where tops have occurred (above 70%).   There were 11 new highs and 65 new lows in my universe of 4,000 stock on Tuesday.  Among the new highs were 5 stocks that have appeared on some of the IBD100 lists I have followed the past year:  SJI, SXCI, INSU, ROCM and SHEN.  (I own some of these.)  These stocks should be monitored for potential market leaders if this rally continues. The QQQQ has completed the 15th day of a short term up-trend. Happy New Year to all!

Market still on support; GMI: 2; GMI-R: 2

@ 10:48 pm

The market continues to rest on support and is unwilling to tip its hand.  The GMI and GMI-R are both back to two.  This is a good time to sit on the sidelines and wait for the new year.  While the QQQQ completed the 14th day of its short term up-trend, it has moved virtually nowhere during this period (-3.7%).  How can I call this an up-trend?  Because the QQQQ has remained above its critical moving average during this period, even though the average itself has been on a slight downward slant. 

Addicted to market prediction; GMI; 2; GMI-R: 3

@ 12:12 am

GMI1226 Why is it that we all appear to be addicted to predicting the markets?   If you will review the many pundits’ predictions from the beginning of this year (and every year) you will find that it is very rare that anyone successfully predicts the market’s performance over the coming year.   Whether you look at Jim Cramer or Gary Smith or Tobin Smith or any of the media pundits you will find that no one predicted this year’s melt-down, although they all assert that they have been telling people to sell since the beginning of the decline.   (Revisionist history anyone?)   Given the many years of erroneous predictions by all market seers, why do we continue to look to anyone to accurately predict the market’s course?   The simple truth is that the best we can do is to assess the current trend of the market and align our trading to be consistent with it.   And we never know when a trend will end.   Therefore we MUST ALWAYS put in place stop loss orders or other methods to protect each position from a sudden change in the trend…..

For me, the current long term trend of the market remains down, and my university pension has been in cash for months and remains unaffected by the market carnage.

However, the short term trend of the QQQQ remains in an up-trend, having completed its 13th day.   The GMI remains at 2 (of 6) and the GMI-R at 3 (of 10). The Worden T2108 Indicator is at 51%, well in neutral territory.   But my technical indicators are “bearly” positive and unimpressive.   So, I remain mostly in cash in my trading IRA account.