GMI: 6; QLD up 9.6% since GMI turned 3

The GMI is still at the maximum level of 6 and the QQQQ up-trend is in its 19th day.  Since this up-trend began at the end of August, the QLD has increased 9.6%.  Thus, when the GMI turned 3 at the end of August, by just buying this Ultra ETF that rises twice as much as the QQQQ , I could have made 9.6% on my investment, through Wednesday.  Of course, I did start accumulating QLD back then…….

GMI: 6; QLD strong

The GMI remains at a maximum reading of 6.  QLD continues to be strong, as Tuesday was the 18th day in the current QQQQ up-trend.

GMI: 6; 17th day of QQQQ up-trend

The GMI is at a maximum of 6 and the QQQQ up-trend is in its 17th day. Riding QLD and selling covered calls.

GMI: 6; Writing new covered calls

The GMI is at a maximum of 6 and the up-trend of the QQQQ is in its 16th day.  I am holding QLD (the Ultra long QQQQ ETF), and a few long positions.  90% of my covered call positions were called away from me this weekend and I am back in cash.  Time to write new covered calls on IBD100 stocks this week and  to enjoy this up-trend. As Marin Zweig showed years ago, never fight the Fed.

GMI: 6; Options expire Friday

The GMI remains at 6, and options expire Friday.  Time to enter new covered writes.

GMI: 6; Worden T2108 back to 76%

The General Market Index (GMI) remains at the maximum reading of 6.  T2108_on91907 Interestingly, the Worden T2108 indicator (% of NYSE stocks above their 40 day average– click on monthly chart to enlarge) has rebounded from a low in August around 7% to a current reading of 76%.  Market tops occur around 80%, but the market can stay in this high area for months.  The T2108 indicator represents to me the pendulum of the market and comes with the Worden TC2007 stock charting program that I use every day. Most recent market bottoms came when this indicator was below 20%.  In the October 1987 debacle, it fell to under 1%!

I  am eagerly awaiting option expiration this Friday, when most of my stocks will be called away and I can write new October covered calls on  IBD100 stocks that are in steady up-trends.  I will also retain my long position in QLD as long as the GMI remains strong…

See my disclaimers below.

GMI: 6; GMI catches bottom again

The GMI is back to a maximum of 6, and the GMI once again got me in at the beginning of the up-trend. Gmiperf0918  (Click on chart to enlarge.) The QQQQ is now in the 13th day of its up-trend, and I have been accumulating QLD since it began.   Now I am waiting for option expiration on Friday when most of my stocks will be called away at nice profits.  See my disclaimers below.

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GMI: 5; 2nd day with more new lows than highs

The GMI stayed at 5 on Monday but it was the second day where there were a few more 52 week new lows than highs in my universe of 4,000 stocks.  Monday was the 12th day in the current QQQQ short term up-trend. 

GMI: 5; IBD100 stocks not good for buy-and-hold

The General Market Index (GMI) fell one, to 5, as there were only 82 new 52 week highs in my universe of 4,000 stocks.  Surprisingly, there were more new lows, 90, on Friday, than new highs, usually a troubling sign.  Gmiperf091407 But the QQQQ up-trend remains intact and is now in its eleventh day.  (Click on chart to enlarge.)  Most important, the 30 day average (red line) appears to be reversing to the up-side.  If we get a sell-off in reaction to the Fed next week, I will look for support of the QQQQ at the 30 day average, currently at 47.90.  Several closes below the 30 day would decrease the GMI and change my reading of this up-trend.  I continue to accumulate the Ultra QQQQ ETF, QLD……

I have written before that I am frustrated with the way the IBD100 Index portrays the performance of the IBD100 stocks.  IBD continually drops poor performers from the index, thus biasing the results heavily toward the positive.  And a lot of new stocks may be substituted each week.  The table below shows how selected IBD100 stock lists over the past year have performed since the day each original list was published. A very important conclusion can be drawn.  Only about one half of the stocks in each list closed higher last Friday than they did on the day that list was published.  There are two major exceptions.  Only 31% of the stocks on the list from 7/16  Ibdperf091707closed higher on Friday than they closed on that day in mid-July.  Why so few?  Because the Nasdaq 100 index was at the top of its summer rally in mid-July.  In addition, the reason that 82% of the stocks on the list published on 8/20 have advanced since then is that the Nasdaq 100 Index bottomed and started to rally in late August.  The moral of the story—even the fate of the IBD100 stocks is largely determined by the trend of the relevant market index, here the Nasdaq100.  This is the reason why I always trade consistent with the trend of the market, as measured by the GMI.  Another important finding in the table is that the further back one goes, the less likely are the IBD100 stocks to be near their 52 week highs.  After about 4 months, the IBD100 stock lists tend to look a lot like the stocks in the Nasdaq100 or S&P500 stock indexes, with 16-20% within 5% of their 52 week highs. It looks like the IBD100 stocks are not good candidates for a long term buy-and-hold strategy. Then again, neither are most stocks…..

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GMI back to maximum of 6; Trend is up; IBD100 leaders

The GMI (General Market Index) is now back to 6 for the first time since July 23.  Gmiperf0913 (Click on chart to enlarge.)  Thursday was the 10th day in the current QQQQ up-trend.  The Worden T2108 indicator is now back to 52, the highest since July 13 and up from a low of  8 on August 15.  This pendulum of the market has swung back to positive and does not typically top out until well above 80.  The following stocks on the IBD100 lists some time in the past year hit a new high on Thursday:

BIDU,RIO,VIP,PCLN,CHL,MT,TPX,HANS,CTRP,MTL,BRLI,

FSTR,ICLR,CAM,NVT,DKS,WHQ,OII,LVS,DWSN,SU,HMSY,

FTI,ROS,LAYN,DIOD,RIMM,OIL

This list probably contains many of the market leaders-to-be over the next few months.  See my disclaimers below.



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