GMI:5; GMI-S: 56; Buying QLD again

The GMI rose to 5 and the GMI-S to 56.  It looks like this is the 2nd day of the new QQQQ up-trend.  Gmi0110_1 There were 138 new 52 week highs in my universe of 4,000 stocks.  69% of the Nasdaq 100 stocks rose along with 59% of the S&P 500 stocks and 57% of the Dow 30 stocks.  I am accumulating QLD again as the QQQQ index rises. A lot of stocks are bouncing off of support. 

GMI: 3; ATHR cup with handle?

The GMI rose to 3, and there were 146 new 52 week highs in my universe of 4,000 stocks on Tuesday. The QQQQ strengthened and is now in the first day of an up-trend (U-1).  While AAPL and GOOG rose, RIMM fell.  Gmi0109_1 This market continues to be mixed.  56-61% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Tuesday. The GMI-S rose to 38, as almost all of the short term indicators for the QQQQ are now positive.

Recently, ATHR caught my eye as a possible cup with handle pattern.Athr Here is a weekly chart of the stock (I own it).  A break above the top of the handle, around 25, on high volume would lead me to accumulate this stock. Of course I would hope that the GMI is a little stronger when that happens.  Break-outs tend to succeed when the GMI is strong.

Please note the disclaimers below.

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GMI: 2; Mainly in cash

The GMI is at 2.  52-58% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Monday.  Gmi0108 There were 111 new 52 week highs in my universe of 4,000 stocks. The trend of these indexes is just too murky for me right now.  I am mainly in cash.

GMI: 1; GMI-S: 25; IBD 100 underperform; Down-trend here?

The GMI fell to 1 on Friday, although two of its indicators are too close to be definite.  The GMI-S fell to 25, indicating that most of my short term indicators for 4 primary index ETF’s (SPY,DIA,QQQQ,IJR) are negative. There were only 72 new highs in my universe of 4,000 stocks and only 35 successful 10 day new highs (few of the stocks that hit a new high 10 days ago closed higher on Friday than they closed 10 days earlier).  Gmi0105_1 The daily indexes for both the SPY and QQQQ are now likely negatives.  The DIA daily indicator is also close to turning negative.  The IBD Growth Mutual Fund Index is also negative–below its 50 day average.  When these fund managers are not doing well, I do not make money buying growth stocks. Only 32% of the Nasdaq 100 stocks rose on Friday, along with 22% of the S&P 500 stocks and 10% of the Dow 30 stocks.  Only 52% of the stocks in my universe closed above their 10 week averages, the lowest reading since 52% on August 10, before last summer’s rally.

In addition, according to Monday’s IBD, the put/call ratio on Friday was .41, close to the lowest reading reached in the past 12 months (.38 on March 16, 2006). A low p/c ratio suggests relatively fewer people bearish enough to buy puts, a contrary indicator, often signaling impending market weakness.

The IBD 100 lists of stocks that I have been following also exhibited poor  performance, relative to the Nasdaq 100 stocks. Only 19-26% of the stocks in these six lists rose on Friday, compared with 32% of the Nasdaq 100 stocks.  And only 25-45% of the stocks closed above their average price of the past 30 days, compared with  49% of the Nasdaq 100 stocks. Some of the lists did have more new highs, though. It is noteworthy that only 35% of the stocks on the IBD 100 list published on 12/18 closed higher than they did on that date.  Buying IBD 100 type growth stocks has not been profitable in the past few weeks.   Ibdperf0105

So, with the GMI at 1 and the QQQQ and SPY showing weakness, I bought two of the inverse index ETF’s, QID and SDS.  I know I took a loss last week on my prior QID purchases, but this market appears to be in transition with considerable whipsawing going on.  Bernard Baruch wrote that he often times bought and sold stocks near the top in 1929, as he tried to catch the major trend.  Time will tell if we are at the beginning of a major down-trend.  Right now, the prudent course for me is to make small bets on the down-trend with close protective sell stops, in case the market moves up.  If the down-trend deepens, I will accumulate the inverse ETF on the weaker index. Be careful out there.  This is no longer an upward trending market.

Be sure to read my disclaimers at the bottom of my previous post.

GMI: 5?; 100% cash

The GMI is 5 with a "?"  The GMI-S rose to 44, with improvement in the QQQQ short term indicators. It is too early to tell if the Daily QQQQ Index has turned positive. Gmi0104_1 The short term QQQQ trend is just too difficult to decipher.  There were only 126 new 52 week highs in my universe of 4,000 stocks. However, 80% of the Nasdaq 100 stocks rose, but only 48-50% of the S&P 500 and Dow 30 stocks.  Clearly this was a schizoid market.  Only 56% of the IBD 100 stock list from 12/18 advanced.  So the gain on Thursday was mainly in the large tech stocks in the Nasdaq 100 index.  The leaders, RIMM, GOOG and AAPL all looked good, for a change.  With the market trend so murky, I sold my QID with a loss and went to 100% cash.  This is not the time for me to make large bets on the QQQQ trend.

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GMI: 5; Nasdaq 100 index weak

The GMI remains at 5.  54-60% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Wednesday.  Gmi0103_1 There were 33 new 52 week lows in my universe of 4,000 stocks, the largest number since November 2.  Wednesday was the 8th day in the current QQQQ down-trend.  Given the rapid retreat from Wednesday’s highs, do we need more evidence that this market is topping?  The leaders, AAPL, RIMM and GOOG continue to weaken. I am slowly accumulating QID as the QQQQ down-trend continues.

See my disclaimers at the bottom of my prior post.

GMI: 5; GMI-S: 31; The Dow’s dirty little secret;

We  keep hearing about how the Dow is at an all-time high.  I looked at the price range of the 30 Dow stocks since the bubble top in 2000.  Was I surprised to find that only 10 of the 30 stocks (33%) surpassed their 1999/2000 top in 2006:  CAT, XOM, BA, AXP, JNJ, MO, C, UTX, MMM and PG.  The fact that the Dow 30 average reached an all time high in 2006 is meaningless when 20 of the 30 stocks never got above their 1999/2000 bubble peaks!  It all boils down to media hype to get unsuspecting investors to enter this record high market

Meanwhile the GMI closed on Friday at 5 but the GMI-S fell 19, to 31. Gmi1229_1 With the media talking about another great year, it is interesting that my short term indicators for the Nasdaq 100 stocks and the S&P 600 Small Cap stocks are all negative.  Only 18% of the Nasdaq 100 and S&P 500 stocks rose on Friday, along with 23% of the Dow 30 stocks.  Just 33% of the Nasdaq 100 stocks have closed above their 30 day averages.  Only 18% of the IBD 100 list from 12/18 advanced and only 29% closed higher than they did on 12/18.  Friday was the 7th day in the current QQQQ down-trend.

So, rather than try to predict the market, we need to look at what the market is doing now.  The Nasdaq 100 stocks clearly are in a short term down-trend.  The past leaders, RIMM, AAPL and GOOG, all look tired, and it has been several weeks since they hit new highs. Since the QQQQ hit a new high on 11/24, it has fallen 3.34% and 63% of the Nasdaq 100 stocks have declined.  In fact, only 26% of the Nasdaq 100 stocks are up 1% or more since 11/24.  With odds like these, I am mainly in cash and ready to accumulate more QID if the QQQQ continues to weaken.

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GMI: 5; Happy New Year!

The GMI remains at 5 and the GMI-S is at 50.  Only 35% of the Nasdaq 100 stocks rose on Thursday, along with 32% of the S&P 500 stocks and 43% of the Dow 30 stocks. Gmi1228_1 There were 231 new 52 week highs in my universe of 4,000 stocks.  Thursday was the 6th day in the current QQQQ down-trend.  The Nasdaq 100 stocks and the Dow 30 stocks are clearly on different tracks.  It remains to be seen next year which of these indexes will lead the market.

Happy New Year to all of my readers, and I hope to see you back next year.  Please see my disclaimers at the bottom of yesterday’s post. 

GMI: 5; AAPL; IBD 100 stocks stronger than Nasdaq 100; window dressing?

I guess we all know why AAPL has been weak.  See the beauty of technical analysis?  The bad news was evident in the stock movement long before it was revealed to the rest of us….

The GMI remains at 5, as the major indexes recovered.  72% of the Nasdaq 100 stocks rose on Wednesday, along with 84% of the S&P 500 stocks and 97% of the Dow 30 stocks.  Gmi1227 There were 306 new 52 week highs on Wednesday and only 7 new lows in my universe of 4,000 stocks.  Still, the QQQQ remains in a downtrend; Wednesday was the 5th day of the current down-trend. The GMI-S is back to 50, but none of my short term indicators for the QQQQ are positive.  We will need to see the end of the 4th quarter mutual fund "window dressing," before we know if this rally is for real.  For now, I remain cautious and skeptical.

An interesting difference in strength occurred on Wednesday in the Nasdaq 100 stocks and the IBD 100 stock lists that I follow.Ibdperf1227 90% or more of the IBD 100 stocks rose on Wednesday, compared with 72% the Nasdaq 100 stocks.  More of these IBD 100 stocks hit new highs and they were more likely to close above their 30 day averages.   It sure looks like the fast growing type of stocks selected for  the IBD  100 lists are outperfoming the Nasdaq 100 stocks right now.  Growth stock window dressing by the mutual funds who want to include the winners in their end of year portfolio statements?  What a great way to look smart, given that the funds fail to disclose the price and date of their acquisitions during the prior quarter….

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GMI: 5; 4th day of QQQQ down-trend

The GMI rebounded to 5 on very light volume on Tuesday and will fall back on any market weakness.  64% of the Nasdaq 100 stocks rose, along with 75% of the S&P 500 stocks and 87% of the Dow 30 stocks.  Gmi1226 There were 167 new 52 week highs in my universe of 4,000 stocks.  Still, the QQQQ is in the 4th day of its current down-trend.  AAPL and RIMM continued to weaken and only 62% of the IBD 100 stock list from 12/18 advanced.  See yesterday’s post below,  for my disclaimer.



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