GMI: 1; GMI-S: 25; X and TSO; IBD 100 new highs
The GMI is still 1 and the GMI-S rose to 25. Still, the trend is down in the major indexes. Monday was the 10th day in the QQQQ down-trend. In spite of the general market down-trend, two stocks that are bucking this trend are X and TSO, both of which I own. It remains to be seen how far this bounce will go and I am mainly in cash. I also own puts on some weak stocks. The only way to go short in an IRA is through buying put options.
Any stock that could come through the recent market declines and then hit a new 52 week high is showing notable strength. The following 14 recent IBD 100 list stocks hit a new high on Monday: JSDA,BTJ,HURN,GLP,DECK,MIDD,TSO,ETP,AVT,BWP,WCG,FDS,SIMO, CCK. If I were looking for stocks to buy, I would start researching this list.
GMI:1; Minimal changes
GMI: 1; GMI-S: 0
The GMI remains at one. Only 35-40% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 stock indexes rose on Wednesday. There were only 49 new highs in my universe of 4,000 stocks and 31 new lows. Only 11% of these stocks are in a short term uptrend and only 34% closed above their 10 week averages. The QQQQ and SPY are in their second week below their 10 week averages. The QQQQ down trend is in its 7th day. I am mainly in cash and looking for shorts.
See my disclaimers at the bottom of my prior post.
GMI: 1;GMI-S: 0
The GMI remains at one, and the GMI-S is now zero. All of my short term indicators for four indexes are negative. The bounce on Tuesday is far from signifying a change in trend. It will take a lot of time for the technical damage to be healed. I am looking for an opportunity to short this market once it rebounds to resistance levels. I would be interested in QID below 54 as a bet for the QQQQ to fall again.
GMI: 1; GMI-S: 13; IBD 100 stocks not safe either; Cash or short
The GMI is one, and the GMI-S is 13. Only 14% of the Nasdaq 100 stocks closed above their 30 day averages and only 20% are in an up-trend, the lowest percentage since last July. There were only 45 new highs in my universe of 4,000 stocks, and 60 new lows. Only 12% of the 369 stocks that hit a new high 10 days ago closed higher than they did 10 days ago. This is clearly not the type of market to invest in growth stocks with the hope they will hit new highs. Both the SPY and QQQQ closed below their 10 week averages. Only 35% of the stocks in my universe closed above their 10 week averages. Friday was the 4th day in the current QQQQ down-trend.
The IBD 100 stocks did not offer a refuge from this market decline. As the accompanying table shows, few of the stocks in the IBD 100 stock lists I have been following did better than the Nasdaq 100 stocks. Only 6-15% of the stocks in these lists rose on Friday, compared with 9% of the Nasdaq 100 stocks. There were a maximum of 4 new highs and only 19-24% of the the stocks in each list closed above their 30 day averages, slightly above the 14% for the Nasdaq 100 stocks. Under 50% of the stocks in the lists published since November closed higher than on the day the list was published.
Buying stocks in the current market down-trend represents to me fighting the odds. Since about 70% of all stocks go with the market averages, one should be in cash or short. There is plenty of time to go long once a new up-trend establishes itself.
See my disclaimers at the bottom of yesterday’s post.
GMI: 1; In cash
The GMI remains at one. Only 24-34% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Thursday. There were 54 new highs and 77 new lows in my universe of 4,000 stocks. Only 43% of the stocks in my universe closed above their 10 week averages. The real reasons behind the markets plunge may be yet to be disclosed. Time to stay in cash.
GMI: 1; Dead cat bounce
The GMI remains at 1. 56-66% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Wednesday. Only 37 stocks in my universe of 4,000 stocks hit a new high. The Dow could only manage a rise of 52 points after falling 400+ the day before. This looked like a feeble dead cat bounce and suggests that there is more weakness to come. Right now it is time to be in cash while we wait for trends to develop.
See my disclaimers at the bottom of yesterday’s post.
GMI: 1; GMI-S: 25; more new lows than highs; play it safe
The only tip off to today’s financial meltdown that I noticed, was the extreme weakness in MER, LEH and BSC, that showed up beginning last Friday when persons in the know apparently started to sell the investment bankers. The GMI is now 1 and the GMI-S is 25. There were 52 new highs and 64 new lows in my universe of 4,000 stocks. Even the IBD growth mutual fund is now negative. When these mutual fund managers cannot make money, neither can I when trading growth stocks. 0-1% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose, the worst I have seen since I began blogging 2 years ago. Only 33% of the Nasdaq 100 stocks closed above their 30 day averages on Tuesday. This is no time to be brave, and it would be wise to stay in cash until things settle.
GMI: 6; GMI-S: 75
The GMI is still 6, and the GMI-S fell to 75. Only 28-43% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Monday. There were 291 new highs in my universe of 4,000 stocks. Monday was the 8th day in the current QQQQ rally.
See my disclaimers at the bottom of yesteray’s post.
GMI: 6; GMI-S: 88; Dow climbs wall of worry; IBD 100 stock performance; some cups with handles
GMI: 6; GMI-S: 88; GMI-L: 100. Time to take stock. First of all, it is amazing how many people are wringing their hands expecting the markets to correct. I will return to this point later. Note that there were 223 new highs and only 16 new lows in my universe of 4,000 stocks on Friday. The SPY has closed above its 10 week average for 27 straight weeks; the DIA has done so for 30 weeks. While the QQQQ has not done as well as these indexes, it fell below its 10 week average in late December and for a few weeks this year, the QQQQ is now in its 4th consecutive week back above its 10 week average. Even though my short term indicators have revealed some bumps in the road, the GMI-L longer term indicators for four indexes have closed above 90 since last September. In my major pension account where I use a longer term trading strategy, I have stayed 100% invested in mutual funds since last fall.
Given the strength in the markets the past six months, I guess it is understandable that the media pundits think it is time for a correction. But when I looked at this monthly chart of the Dow 30 index, it appeared to me that we are closer to the beginning of a run than to the end. Note that the Dow peaked in 2000 and bottomed out in 2002. Since then it has taken five years to come back and break out to new highs. When a market declines and then builds a large multi-year base and has the buying strength to overcome the overhead supply (from persons who bought at higher levels and sell as soon as they break even) and pushes through to new highs, it often portends a considerable rise. The Dow spent many years bouncing down off of the 1,000 resistance level in the 60’s and 70’s before it finally burst through in 1982 at the start of a long bull move. I am not suggesting that we are at the beginning of such a big move. But the rise we have seen in the Dow the past few months pales in comparison to the length and magnitude of the Dow’s rise from 1995-2000. Then again, a bull market does need to climb a wall of worry…………………
So how have the IBD 100 stocks been doing lately? As this table shows, the seven IBD 100 lists that I have followed since 5/15 did about the same as the Nasdaq 100 stocks recently. While 35% of the Nasdaq 100 stocks rose on Friday, 28-52% of the stocks in the seven lists did so, with the oldest list stocks doing somewhat better. This may be because the oil stocks that made up more of these older lists started to outperform again last week as the price of oil rose. There were 7 new highs in the Nasdaq 100 stocks on Friday and 2-7 in each of the IBD 100 lists. With the exception of the list from 5/16, two thirds of the stocks in each list closed higher on Friday than they did when their respective lists were published. Also, about two thirds of the Nasdaq 100 and IBD 100 stocks closed above their 30 day averages. It looks to me like the Nasdaq 100 stocks and the IBD 100 type of growth stocks have been performing similarly of late. Is it time for these super growth stocks to out-perform?
As to the possible cup-with handle stocks I have recently written about, both ATHR and NUAN seem to be in established up-trends. CEPH has not yet broken out and is sitting on support. RVSN, on the IBD 100 stock list from 12/15, is another possible break-out from a cup with handle formation. It’s pivot point was around 21.75 and it may be an interesting buy if it holds that level. It closed Friday at 21.83. According to O’Neil, a stock bought at the proper pivot point should not decline 8% below that point. If it does, it should be sold. I like to buy IBD 100 stocks that break from a base on high volume because I am confident that the stock has also passed IBD’s stringent fundamental criteria. GLD, while not on the IBD 100 list, appears to be resuming its up-trend. What does the rising price of gold and the declining dollar portend for our future?