GMI: 2; GMI-R: 2; QQQQ trends remain down
The GMI and GMI-R are each 2. QQQQ daily and weekly trends remain down. Time to be short or in cash.
GMI: 1; GMI-R: 1; 425 new lows; daily and weekly QQQQ trends down
The GMI and GMI-R are each 1. There were 51 new highs and 425 new lows in my universe of 4,000 stocks on Tuesday. Only 16% of the Nasdaq 100 stocks closed above their 30 day averages, the lowest percentage since March 10. The Worden T2108 indicator is now at 19%, getting close to bottom area. After 4 down days, the QQQQ will most likely bounce on Wednesday. This may be an opportunity to short the market (or buy QID) at higher levels. The daily and weekly trends of the QQQQ are now down.
GMI: 2; GMI-R: 2; Most new lows since March; CPST
The GMI and GMI-R remain at 2 each. There were 90 new highs and 337 new lows in my universe of 4,000 stocks on Monday. Monday was the 9th day of the current QQQQ down-trend. CPST still rocks.
GMI: 2; GMI-R: 2; 8th day of QQQQ down-trend; Stage 4?
The GMI and GMI-R are back to 2. There were 45 new highs and 279 new lows in my universe of 4,000 stocks on Friday. The QQQQ is in the 8th day of its down-trend. I am mainly in QID and hedged in covered calls on some of the strongest IBD100 growth stocks. The QQQQ is only 0.32 above its declining 30 week average (see weekly chart below). If the QQQQ closes below its declining 30 week average it will confirm a Stan Weinstein Stage 4 down-trend typical of bear markets.
The SPY and DIA have already done so. Only 21% of the Nasdaq 100 stocks closed above their 30 day averages; the last time it was below 21% was during last March's decline. It's beginning to look like the rise since last March was a retracement of the decline from the October 2007 top, and that a second leg down is beginning. The Worden T2108 indicator is now at 23%, still above the extreme low levels reached at the bottom of most declines.
GMI: 3; GMI-R: 5; 7th day of QQQQ down-trend
The GMI is at 3 and the GMI-R is at 5. There were 102 new highs and 242 new lows in my universe of 4,000 stocks on Thursday. We will have to wait for next week after options expiration to see the market's true trend. Thursday was the 7th day of the current QQQQ down-trend.
GMI: 2; GMI-R: 3; Conditions deteriorating
The GMI fell to 2 (of 6) and the GMI-R to 3 (of 10). Wednesday was the 6th day of the current QQQQ down-trend. There were 84 new highs and 275 new lows in my universe of 4,000 stocks on Wednesday. The Worden T2108 indicator is back to 29%, still above bottom territory (below 20%). After option expiration on Friday, we may see the market decline accelerate. It is time to be hedged or in cash or short.
GMI: 4; GMI-R: 5; CPST breaks out again
The GMI rose to 4 and the GMI-R fell to 5. There were 114 new highs and 123 new lows in my universe of 4,000 stocks on Tuesday. The QQQQ failed to break through its 30 day average. So the QQQQ is still providing few clues as to its probable direction. Tuesday was the 5th day of the current QQQQ down-trend. Meanwhile, CPST, a Judy's pick at $1, broke out again.
GMI: 3; GMI-R: 6; Critical juncture; China stocks toppy?
The GMI is at 3 (of 6) and the GMI-R is 6 (of 10). The GMI-R is more sensitive to short term trends and reflects the growing strength in the QQQQ. There were 91 new highs and 92 new lows in my universe of 4,000 stocks on Monday. The QQQQ is right up against resistance. A close above 49 will push the GMI into bullish territory. The strength in RIMM and the fact that the IBD Growth Mutual Fund Index has retaken its 50 day average suggest to me that this rally may have further to go, at least through option expiration this Friday.
Meanwhile, I think that China stocks are about to break down. A lot of individual China stocks (CHA, SNP, PTR, LFC, CHL, ACH, JFC, GCH, CEA, ZNH, CHN) have the reversal pattern reflected in this ETF, FXI. Note the reversal in the 30 week moving average (red line). I would not hold any stocks with this ominous pattern; I own puts on LFC.
GMI: 1; GMI-R: 1; 3rd day of QQQQ down-trend; call options on QID
The GMI and GMI-R remain at 1. There were 33 new highs and 184 new lows in my universe of 4,000 stocks on Thursday. Only 21% of the Nasdaq 100 stocks closed above their 30 day averages. This is not the time to be brave. I must follow the trend of the markets, which is down. When the major popular growth stocks
(AAPL, RIMM, ISRG, BIDU) begin to crack, the rest of the market will
likely follow. Why swim against the tide? I am mainly in cash but also own July call options on QID. The QID is designed to rise twice as much as the QQQQ declines. I am therefore betting that the QQQQ is headed down, at least near term.
GMI: 1; GMI-R: 1; Safely in cash or in QID
The GMI and GMI-R are now each 1, indicating a very weak market. The Worden T2108 indicator is now at 27%, still above the level at which bottoms typically occur. There were 35 new highs and 276 new lows in my universe of 4,000 stocks on Wednesday. Wednesday was the 2nd day of the new QQQQ down-trend. I am in cash and in QID.