GMI: 6; AAPL and RIMM bounce

The GMI is still 6.  39% of the Nasdaq 100 stocks advanced on Wednesday, along with 50% of the S&P 500 stocks and 40% of the Dow 30 stocks. Gmi1213_1 There were 266 new 52 week highs in my universe of 4,000 stocks. 47% of the stocks on the IBD 100 list from 11/20 advanced and only 8 of them hit a new high.   Wednesday was the 82nd day in the QQQQ up-trend.  AAPL and RIMM appeared to bounce off of major moving averages on Wednesday, but GOOG continued to weaken.  This market has yet to tip its hand.


GMI: 6; GMI-S: 63; 81st day of QQQQ up-trend; 59% of stocks declined since peak

The GMI is back to 6 but the GMI-S slipped to 63. Gmi1212_1 Only 31% of the Nasdaq 100 stocks rose on Tuesday, along with 45% of the S&P 500 stocks and 43% of the Dow 30 stocks. Only 21 of the IBD 100 stocks from 11/20 advanced and 13 of them hit a new 52 week high.  Just 58% of the Nasdaq 100 stocks closed higher than their 30 day averages, down from 74% on November 24.  This market has still not tipped its hand.  However, the fact that the market leaders (AAPL, GOOG and RIMM) have all closed below their 30 day averages is a bad omen for the general market. Since the QQQQ peaked on 11/24, that index has fallen 1.9% and 59% of the Nasdaq 100 stocks have declined.

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GMI: 5; GMI-S: 69; 80th day of QQQQ up-trend

The GMI declined one, to 5, as there were only 96 stocks that hit a new high 10 days ago and closed higher on Monday than they closed 10 days ago. (I count 50% as positive for this indicator only if there were too few new highs 10 days earlier to achieve the required 100.) Gmi1211_1 50-56% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Monday.  There were 259 new 52 week highs in my universe of 4,000 stocks.  53% of the IBD 100 stocks published on 11/20 rose and 20 of them hit a 52 week high.  The GMI-S slipped 6, to 69, as one of the short term indicators for the IJR (S&P smallcap 600 ETF) turned negative. Monday was the 80th day of the current QQQQ up-trend.

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GMI: 6; Follow instruments and/or gut? IBD100 stocks thrive

The GMI remains at a maximum of 6.  Gmi1208_1 There were 195 new yearly highs in my universe of nearly 4,000 stocks on Friday and Friday was the 79th day in the QQQQ up-trend.  55-62% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Friday.

With my market indicators so positive, some of you have written to me asking me why I have been raising cash and even taking on a position in QID, the ultra inverse ETF for the QQQQ.  You raise an important question that I have been struggling with.  Why not stay with the up-trend signaled by the GMI and not try to anticipate a change in trend?  You may be right– maybe I should fly on instruments.  But doing so subjects me to a possible large cut in my profits because my indicators will only call the peak after the indexes have fallen some.  So, to retain profits I have decided to cut back.

Furthermore, while the GMI indicates that the up-trend is intact, there are a number of other signs that make me cautious:  1) there are twice as many bullish  than bearish newsletters; 2) some market leaders (GOOG, AAPL and RIMM) have stopped hitting new highs; 3) the MACD for the QQQQ is declining; 4) the QQQQ has closed 7 of the past 10 days below its 10 day average; and 5) market peaks have been common in December the past 5 years.

In addition to the above, I prefer to phase in and out of my positions in the market index ETFs.  When I turned bullish I bought on the way up.  Now, I am simply cutting back in stages.  If it turns out that some of the warning signs above lessen or reverse,  I will buy more QLD again…..

Meanwhile the IBD 100 lists in the recent past have done quite well. Ibdperf1208Four of the five lists closed higher than on the day they were published.  64-82% of the  individual stocks closed higher than their 30 day averages.  The list from 11/20 had 16 new yearly highs on Friday. Compared with the Nasdaq 100 stocks, the IBD 100 type of growth stocks appear to be thriving in this market.

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GMI: 6; Leaders continue to weaken; QQQQ up-trend looking tired

While the GMI is still at 6, the market looks weak to me.  Gmi1207 Yes, there were 332 new yearly highs in my universe of 4,000 stocks.  But only 14% of the Nasdaq 100 stocks advanced on Thursday, along with just 26% of the S&P 500 stocks and 37% of the Dow 30 stocks. And only 29% of the IBD 100 stocks from 11/20 rose.  And GOOG closed below its 30 day average, as did RIMM (barely).  And AAPL fell 3.1%.  When the market leaders can’t command higher prices, it bodes poorly for the other troops.  So I am back to 70% cash as I wait to see if the market up-trend is ending. QID, the inverse ultra QQQQ ETF that is designed to increase as the QQQQ falls, increased 1.35% on Thursday on the highest up volume since this ETF was launched in September.  A lot of money is betting that the QQQQ will decline–as have I.  I have been slowly transferring my money from QLD to QID.  This QQQQ up-trend at 78 days is looking mighty tired to me….

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GMI: 6; 77th day of QQQQ up-trend

The GMI is still 6. But only 43-47% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Wednesday.  Gmi1206_2 There were 330 new yearly highs in my universe of 4,000 stocks.   Wednesday was the 77th day in the current QQQQ up-trend.

GMI 6; GMI-S: 81; Most 52 week new highs since April top; Bullish Trend Indicator at new peak of 71%

The GMI is at the maximum of 6 and the GMI-S now registers 81.  All four short term indicators for the SPY are now positive. Gmi1205_1  There were 554 new yearly highs in my universe of 4,000 stocks, the most since April 19 (also 554), before the QQQQ began its decline that ended in July.  At the bottom in July my Bullish Trend indicator bottomed out at 28% and has been steadily rising to its current new high of 71%.  Curiously, only 49% of the Nasdaq 100 stocks rose on Tuesday, compared with 60-64% of the S&P 500 and Dow 30 stocks.  67% of the IBD 100 stocks from 11/20 rose and 26 of them hit a new high.  So the IBD 100 type growth stocks outperformed these other stocks yesterday. Tuesday was the 76th day of the current QQQQ up-trend.

I know I should stop trying to anticipate market turns.  But with some indicators at peaks,  some leaders refusing to hit new highs (AAPL, GOOG, RIMM), and with the knowledge that market tops occurred in the Dec/Jan period the past few years, I am lightening up on my longs.  Of course I will wait for a real sell signal in the GMI to take larger short positions….

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GMI: 6; GMI-S: 75; 75th day of the QQQQ up-trend

The GMI is still 6 and the GMI-S climbed to 75.  Gmi1204 87-93% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 stock indexes advanced on Monday. There were 471 new 52 week highs in my universe of 4,000 stocks.  Monday was the 75th day of the current QQQQ up-trend.

GMI: 6; IBD 100 stocks from 11/20 outperform Nasdaq 100 stocks

The GMI is still 6. But only 25-35% of the stocks in the  Nasdaq 100, S&P 500 and Dow 30 indexes rose on Friday.  Gmi1201_2 There were 238 new 52 week highs in my universe of 4,000 stocks. Friday was the 74th day of the current QQQQ up-trend.  While the GMI remains at 6, I am concerned by the weakening in the GMI-S indicators. For the first time since this up-trend began, the QQQQ has closed 5 consecutive days below its 10 day average, which itself is curving down.  The leaders are also weakening.  GOOG closed below its 30 day average for the first time since last August.  (I had already sold my GOOG.)  AAPL has also stalled for now, although it remains in an up-trend. I therefore lightened up a little on the QLD and bought some QID.  I am hedged a little on the direction of the QQQQ and will wait to see which trend unfolds.

The IBD  100 stocks have been Ibdperf1201_2 holding up okay.  The best list in this table, the one from 11/20, had 13 new highs on Friday, compared with the Nasdaq 100 stocks that had only 2 new highs.  Note, however, that only 53% of the IBD 100 stocks from 11/20 closed higher on Friday than they did on 11/20.  Still, 77% closed above their average price for the past 30 days, compared with 58% of the Nasdaq 100 stocks.

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GMI: 6; SmallCap strength?

The GMI is still 6, as 50-55% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Thursday. Gmi1130_1 There were 327 new yearly highs in my universe of 4,000 stocks.  Interestingly, IJR (S&P 600 SmallCap ETF) showed a little strength on Thursday, causing the GMI-S to climb to 63.  As you probably know, small cap stocks are said to show strength around January.  Thursday was the 73rd day in the current QQQQ up-trend.

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