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. 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….
GMI: 6; GMI-S: 75; 75th day of the QQQQ up-trend
The GMI is still 6 and the GMI-S climbed to 75. 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. 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 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.
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. 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.
GMI: 6; Too many bulls?
The GMI is back to 6. 76% of the Nasdaq 100 stocks rose on Wednesday, along with 82% of the S&P 500 stocks and 83% of the Dow 30 stocks. There were 238 new yearly highs in my universe of 4,000 stocks. Wednesday was the 72nd day of the current QQQQ up-trend. One thing I noticed today in IBD bothers me a lot about this market. The Investors Intelligence poll shows 57.5% of investment advisors bullish and only 22.3% bearish. Such extreme bullishness is typical of markets that are topping out…
GMI: 5; Stocks bounce off support
The GMI is still 5, but this time because there were only 71 new yearly highs in my universe of 4,000 stocks. 44% of the Nasdaq 100 stocks advanced on Tuesday, along with 54% of the S&P 500 stocks and 63% of the Dow 30 stocks. 63% of the Nasdaq 100 stocks closed above their 30 day averages. Many stocks and market indexes bounced off of the important support levels I monitor. It is very important that they hold these levels tomorrow. Declines below these levels could cause the GMI to turn negative. Tuesday was the 71st day of the current QQQQ up-trend.
GMI: 5; GMI-S: 50; IBD 100 stocks have stalled
The GMI fell one, to 5 and the GMI-S fell to 50, down 50. My short term indicators for all four indexes, especially the DIA, weakened Monday. Still, there were 117 new highs in my universe of 4,000 stocks. But only 6% of the Nasdaq 100 and S&P 500 stocks advanced on Monday, along with 10% of the Dow 30 stocks. The last time we saw single digit advances in these three indexes was last June 5 (6%, 5%, 3%, respectively) , in the early stages of the decline that ended on July 18. Monday was the 70th day in the current QQQQ up-trend, which remains intact.
The IBD 100 stocks have not done much better than the Nasdaq 100 stocks recently. Only 7-14% of the IBD 100 stocks in the five lists that I have been following advanced on Monday, compared with 6% of the Nasdaq 100 stocks. But only 39% of the IBD 100 stocks from 11/20 closed higher than they did on the day the list was published. Still, 80% of those stocks closed above their 30 day averages, better than the 60% of Nasdaq 100 stocks that did so. Note how few stocks in these lists hit new yearly highs on Monday. Growth stocks have stalled for now.
GMI: 6; Dec or Jan top not unlikely
The GMI is still 6 and all of my indicators are positive. Is a New Year’s rally shaping up? But what do Dec 11, 2000, Dec 6, 2001, Dec. 2, 2002, January 20, 2004 and Dec 15, 2004 have in common? They were all peaks in the QQQQ! So before we jump on the New Year’s Rally bandwagon, maybe we should be open to the possibility that a major market top can form in December or January. In fact, January 11, 2006 was a peak in the QQQQ this year (at 43.31) that was not exceeded until a few weeks ago on November 9, after reaching a low of 35.54 on July 18 (an 18% decline from the January peak). A December or January top is therefore far from unlikely, especially in an atmosphere of frenzied bidding up of IPO’s and a growing number of people with stock market profits betting on a New Year’s rally…………
Meanwhile, Friday was a terrible day for the Nasdaq 100, with only 22 of the 100 stocks advancing, the lowest number since November 1. 35% of the S&P 500 stocks rose on Friday along with 23% of the Dow 30 stocks. While only 12% of the Nasdaq 100 stocks rose on November 1, that was two days before the latest push up began. Friday was the 69th day in the current QQQQ up-trend. Stay tuned……..
The GMI is still 6 and 60-67% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Wednesday. There were 356 new yearly highs in my universe of 4,000 stocks. Only 58% of the stocks on the IBD 100 list from 11/20 advanced on Wednesday. Wednesday was the 68th day in the current QQQQ up-trend and the 15th week that the QQQQ has closed above its 10 week average.
GMI: 6; We don’t have to catch the exact bottom to profit
I do not often recommend individual stocks, but after the close on 10/4, I wrote: "I am riding high with the QLD, a ProShares ETF that moves twice as much as the QQQQ, which it mimics. I am also holding IAI, an ETF of U.S. brokerage stocks, a group that typically rises in bull markets when trading volume expands. Why not own a piece of the casinos. Other stocks that came alive today include RIMM, and finally GOOG, both of which I own." Since I posted the above on 10/4, QLD has increased +15%, IAI is up +8%, GOOG is up +22% and RIMM is up +27%. One did not have to catch the bottom in August to profit from this rise. Contrary to what many pundits claim, there is plenty of time to catch the train after it has left the station……
The GMI is still at the maximum reading of 6. On Tuesday there were 275 new yearly highs in my universe of 4,000 stocks. 53% of the Nasdaq 100 stocks rose, as did 54% of the S&P 500 stocks and 43% of the Dow 30 stocks. 63% of the stocks on the IBD 100 list for 11/20 advanced on Tuesday. 73% of the Nasdaq 100 stocks closed above their 30 day averages, well below the peak of 88% reached on 10/16. 76% of the stocks in my universe closed above their 10 week averages, also below the peak of 83% reached on 10/16. October 16 was the last short term peak in the QQQQ. So, it looks like this rally has more to go before these two indicators reach the heights attained when the market hit a minor peak in mid-October.