GMI: 5; GMI-S: 50; Scary market
The GMI declined to 5, and the GMI-S fell 25 to 50. Only 7% of the Nasdaq 100 stocks rose on Thursday, along with 18% of the S&P 500 stocks and 10% of the Dow 30 stocks. Only 14% of the IBD 100 stock list from 12/18 rose and only 49% closed above their price when the list was published on 12/18. Still, there were 253 new highs in my universe of 4,000 stocks. The Daily QQQQ Index turned negative again, but its trend is still questionable. The 30 day moving average of the QQQQ is flat and the index is gyrating up and down along this line. The DIA and SPY are also starting to weaken, however. So, this may be the beginning of a meaningful decline in all of these indexes. The QQQQ is back below its 10 week average, a key sign of weakness. We will have to wait a few more days to see if the GMI weakens further. Now is not the time to make large bold bets in either direction.
GMI: 6; GMI-S: 75; Whipsawed again
The GMI returned to 6 and the GMI-S rose to 75. The QQQQ appears to be starting another up-trend (U-1). It also looks like GOOG may have another earnings related bounce–it reports on 1/31. There were 303 new highs on Wednesday in my universe of 4,000 stocks. 80-90% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose. The 30 day moving average for the QQQQ is flat and when that happens the index often times goes back and forth around its 30 day average. These whipsaw moves are very frustrating and hard to trade profitably. As long as the GMI is above 3, it may be better to stay long in the other ultra long index ETF’s; MVV, SSO and DDM. Their underlying indexes are exhibiting consistent up-trends.
See bottom of my prior post for my disclaimers.
GMI: 5; Day 1 of QQQQ down-trend?
The GMI fell to 5, as the Daily QQQQ Index turned negative. Still, there were 208 new 52 week highs in my universe of 4,000 stocks. And the GMI-S rebounded to 63, with strength in the small-cap stocks (IJR). This looks like the first day in a new QQQQ down-trend (D-1), but time will tell.
See my disclaimers at the bottom of today’s post.
GMI: 6?; GMI-S: 44; Long odds for going long
The GMI remained at 6, bearly (pun intended). However, the GMI-S fell 31, to 44, as many of my short term indicators turned negative. The QQQQ and IJR indicators are almost all negative. Another down day in the QQQQ will turn my Daily QQQQ Index negative. Still, there were 145 new 52 week highs in my universe of 4,000 stocks. But only 17-25% of the stocks in the Nasdaq 100, S&P 500 and D0w 30 indexes rose on Monday. The three market leaders, AAPL, GOOG and RIMM are pretty weak. Also, the QQQQ is now below its 10 week average, a key indicator for me. I rarely make money on the long side in growth stocks when this index is below its 10 week average. So, the odds for going long are getting pretty long for me. See my disclaimers at the end of my prior post.
GMI: 6; Citigroup break out?
The GMI remains at 6. 52-66% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Friday. 58% of the Nasdaq 100 stocks closed above their 30 day averages. There were 140 new highs in my universe of 4,000 stocks.
Friday was the 8th day in the current QQQQ short term up-trend and the 3rd week the index has closed above its 10 week average. So, given these decent stats, why are my trades not working out? For one thing, the QQQQ whipsawed the past two weeks, climbing up and then falling back to support. But since 12/29 the QQQQ is up 2.3% and 61 of its stocks are up 1% or more in that period. The QLD (ultra long QQQQ ETF) is up 4.1%. Believe it or not, GOOG is up 6.4% and AAPL, 4.3% since 12/29. My problem is that I bought more of these stocks (and QLD) as they rose and took losses when they fell back from their highs. The question remains, will these leaders hold support or break down?
Look at this MONTHLY chart of Citigroup (C). I have learned that it is very important to look at three time periods; monthly, weekly and daily, to ascertain trends. After a phenomenal rise in the 90′s, C topped out at 55.15 in September, 2000. It remained below that price for more than 6 years. But on last December 18, C went to a new all-time high and continued on to peak at 57 on 12/28. My guess is that a rise above 57 would be another sign of strength in this stock. When a formerly strong stock breaks out of a multi-year base on high volume, good things tend to happen. Monthly charts can tell us a lot more about long term trends than weekly charts.
GMI: 6; Ominous signs; IBD 100 stocks underperforming
The GMI is back to 6, but be careful. Only 18% of the Nasdaq 100 stocks rose on Thursday, along with 37% of the S&P 500 and Dow 30 stocks. There were 182 new 52 week highs in my universe of 4,000 stocks. And Thursday was the 7th day in the current QQQQ up-trend. But when IBM, MER and AAPL announce good earnings and their stocks weaken, it is an ominous sign. The GMI-S fell 19, to 69. None of my 4 short term indicators for the small cap stocks (IJR) are positive. The IBD 100 type of growth stocks are also underperforming; only 13% of the list from 12/18 rose on Thursday and only 42% closed above their price on 12/18.
I was stopped out of QLD and ATHR today. I will consider buying the ultra inverse ETF for shorting the QQQQ (QID) if the GMI weakens. Right now this market looks sick, although the trend has not turned down yet. See my disclaimers on my prior post.
GMI: 5; AAPL and GOOG weak
The GMI fell to 5 on Wednesday. Only 39% of the Nasdaq 100 stocks rose, compared with 50-53% of the S&P 500 and Dow 30 stocks. Thursday was the sixth day of the current QQQQ up-trend. Both AAPL and GOOG have been weak, not a good sign. But the trend of the QQQQ stocks remains up for now.
GMI: 6; GMI-S: 88; 75% cash
The GMI is still at 6 and the GMI-S rose to 88. All of my short term indicators for DIA, QQQQ and SPY are positive. Tuesday was the 5th day in the current QQQQ up-trend. I hold only long positions and am about 75% cash as I wait to see if this up-trend continues. See disclaimers at the bottom of my prior post.
GMI: 6; GMI-S: 75; Brokers strong; LEH- cup with handle?
The GMI is back to a maximum of 6 and the GMI-S is 75. Stocks are bouncing off of support all over. There were 263 new 52 week highs in my universe of 4,000 stocks on Friday. Friday was the 4th day in the current QQQQ up-trend. I am buying the ultra QQQQ ETF, QLD, again. GOOG and AAPL also are gaining strength along with ATHR. (I own these.)
The brokerage stocks are climbing again. I mentioned quite some time ago that in a rising market, brokers must do well as trading volume tends to rise. Thus, the U.S. brokerage ETF, IAI, rose 6% last week. Brokers that appear to be in up-trends include: MER, GS, BSC, MS, SCHW, SEIC, to name a few. It looks like LEH has just broken out of a cup with handle base pattern. Strength in the brokers suggests good earnings to come and a strong market.
GMI: 5; GMI-S: 63; Leaders reviving
The GMI is still 5 and the QQQQ is in its third day of a new up-trend (U-3). There were 284 new highs in my universe of 4,000 stocks on Thursday. 76-83% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Thursday. 72% of the Nasdaq 100 stocks closed above their 30 day average, up from 32% on December 22. The leaders, GOOG and AAPL, have come back, and ATHR (see post on 1/10) is gaining strength. I own some of these stocks.