GMI: 2; GMI-R: 3; Signs of life in the bull; IBD 100 new highs
It appears that this market is looking for reasons to rise. The GMI is now at 2 out of 6 and the GMI-R is 3 out of 10. All of my very short term indicators for the SPY, DIA and IJR are positive. Only the QQQQ lags and this is the reason for the low numbers on the GMI and GMI-R which are weighted towards the QQQQ. After a large decline, traders buy the relatively safe large caps and tend to purchase the more speculative stocks later after they have profits and their fear dissipates. There were 80 new highs and 51 new lows in my universe of 4,000 stocks on Monday. More than one half (52%) of the Nasdaq 100 stocks are now above their 30 day averages and the Worden T2108 indicator is now at 52%. Many of my other indicators show internal strength in stocks. And many of the stocks I listed in yesterday’s post rose nicely. While the trend remains down, there are signs the bull may be awakening. Thirteen stocks in the current IBD 100 list hit a new high on Monday: SWN, POT, CF, WDC, NGS, FLS, MTL, NEU, GGB, MOS, CMED, RRC and KWK. It is clear that agriculture, oil and commodities remain popular.
GMI: 0; GMI-R: 0; Nibbling a little at rocket stocks
The GMI and GMI-R are still zero. This means that most stocks are in a down-trend. I have therefore been on the sideline for most of the decline. There were 22 new highs and 174 new lows in my universe of 4,000 stocks on Friday. The Worden T2108 indicator stands at 41%, in the neutral range. The markets have been in a tight range since the January decline, going back and forth. At the same time, a small group of sectors and stocks have been rocketing up. It seems to me it may be prudent to nibble a little at these strong performers.
I therefore ran a scan using TC2007 to uncover IBD100 stocks that have been incredibly strong throughout the general market’s decline. The following stocks from the IBD100 lists I have monitored over the past year hit a new high during the past week and meet my strict technical criteria for rocket stocks: MOS, MTL, CF, SID, POT, PCLN, CMED, RRC, PRXL, OIL, SWN. While not an IBD100 stock, I also like FDG, which this monthly chart indicates has had a high volume break-out to a new all-time high, breaking its peak from September 2005. In fact, this monthly chart of FDG looks like a three year cup-with-handle formation. My smart stock picker friend, Judy, is interested in RIMM, which just bounced off of its 30 week average. (She, of course, started buying it in the low 80’s!) I may nibble at some of these stocks and place close stops in case they reverse. Many of these stocks have rich premiums on their March call options. I may buy some shares and immediately write March calls.
GMI: 0; GMI-R: 0; 34th day of QQQQ down-trend
The GMI and GMI-R are both zero. There were 68 new highs and 96 new lows in my universe of 4,000 stocks on Thursday. The Worden T2108 indicator is at 37%. A great time to be on the sideline, in cash.
GMI: 0; GMI-R: 0; 33rd day of QQQQ down-trend
The GMI and GMI-R are back to zero. Wednesday was the 33rd day of the QQQQ short term down-trend.
GMI: 1; GMI-R: 1; 32nd day of QQQQ down-trend
The GMI and GMI-R rose to one because the 10 Day Successful New High Indicator turned positive. The QQQQ is in the 32nd day of its down-trend and there were only 54 new highs and 70 new lows in my universe of 4,000 stocks on Tuesday.
GMI: 0; GMI-R: 0; Bulls = Bears
The GMI and GMI-R remain at zero. There were 11 new highs and 113 new lows in my universe of 4,000 stocks on Friday. Most noteworthy, IBD says that the Investor’s Intelligence Survey indicates that about the same percentage of advisors are bearish as bullish (35.6/36.7). It is rare that there are as many bears as bulls. The last time it happened was near last summer’s bottom. Is this the bottom? You know better than to ask that! The key is that as more people become openly bearish, we get closer to the end of a decline. Note that the Worden T2108 indicator is 36%, still in neutral territory.
GMI: 0; GMI-R: 0; Nice to be in cash!
The GMI and GMI-R are back to zero. Thursday was the 30th day of the current QQQQ short term down-trend. There were 39 new highs and 81 new lows in my universe of 4,000 stocks. The down-trend remains intact and it is very nice to wait out these sharp daily swings in the averages while on the sideline.
GMI: 1; GMI-R: 3; 29th day of QQQQ down-trend
The GMI rose to 1 out of 6 and the GMI-R to 3 out of 10. Wednesday was the 29th day of the current QQQQ short term down-trend. There were only 38 new highs and 55 new lows in my universe of 4,000 stocks on Wednesday. The current bounce in stocks has not yet violated the down-trend.
GMI: 1; GMI-R: 1; 28th day of QQQQ down-trend; some IBD100 new highs
The GMI and GMI-R each advanced to one, because the 10 Day Successful New High Index turned positive. Still, there were only 57 new highs and 74 new lows in my universe of 4,000 stocks on Tuesday. The Worden T2108 indicator is at 46%. There were 13 stocks on my IBD100 lists that hit a new high on Tuesday: POT,KWK,NEU,SID,WMS,JOYG,XTO,CHTT,SWN,UPL,RRC,MEE, MTL. Some of these stocks might become leaders when the bull returns.
GMI: 0; GMI-R: 0; 27th day of QQQQ down-trend
The GMI and GMI-R remain at zero. There were 49 new highs and 120 new lows in my universe of 4,000 stocks on Monday. Monday was the 27th day of the short term down-trend in the QQQQ. The Worden T2108 indicator is at 41%.