GMI: 5; GMI-S: 69; Worden Indicator T2108: 60%; Sell in May?
The GMI fell to 5, as only 47% of the stocks that hit a new high 10 days ago closed higher today than they did ten days ago. The GMI-S also fell to 69, with weakness in short term indicators for all but the DIA. In addition, the Worden Indicator of the percentage of stocks above their 40 day averages has now declined t0 60% after hitting a toppy 80.62% in mid-April. It is not too late for the "sell in May" crowd to be right. A top in May is still possible…….
GMI: 6; IBD 100 stocks outperform
The GMI is still 6. The QQQQ is in the 23rd day of an up-trend. There were 359 new highs in my universe of 4,000 stocks. The QQQQ and SPY have closed above their 10 week averages for five weeks. The Worden indicator is at 75%, still quite high and back down from over 80% in the past two weeks.
The IBD 100 stocks are doing quite well, especially compared with th Nasdaq 100 stocks. It is important to ride the trend and to not anticipate a top. There will be plenty of time to consider going short or to cash once the GMI falls below 4.
GMI: 6; Ultra index ETF’s gain 7-10%; Worden indicator T2108
The GMI remains at the maximum of 6. I do not post daily to this blog anymore, but plan to post any day that the GMI changes. The GMI has been 5 or 6 since the close on March 21. In that time, the QQQQ has increased +5.2%, the SPY is up +4.35% and the DIA is up +5.6%. If we had simply bought and held the ultra ETF’s on these indexes during this period we would have made 9.35% (QLD), 7.73% (SSO) or 10.08% (DDM). For me, this is the preferred way to trade with minimum stress. So, why did I miss this trade? Simply because I ignored my instruments (the GMI) and was afraid to follow them after the February decline……
I have added an indicator to the GMI table. The Worden indicator T2108, that is available on TC2007, calculates the percentage of all stocks that closed above their 40 day moving average. This indicator acts like a pendulum that can reflect the market extremes. Readings above 80% often occur near market tops and bottoms often occur when the index is below 25. No indicator is infallible, but I think this indicator provides an idea of when the market is at extreme. Last week this indicator hit a high of 80.62% and closed at 76.64%. It seems to me we are much closer to a market top than to a bottom, but the GMI is still 6…..
GMI: 6; All indexes in up-trends; Worden indicator near peak
The GMI remains at the maximum of 6. All indexes in this table are in up-trends. According to the Worden indicator, 80.21% of all stocks closed above their 40 day averages. Market tops have tended to occur in the 82-83% area. Should we sell in May and go away?
See prior post for my disclaimers.
GMI: 6; But standing room only at the local traders meetup
While the GMI is still at 6, the local traders’ meet-up meeting was packed. In prior meetings of the other local IBD meet-up, when the crowds came back, we were not far from a market top. We had standing room only last night. Contrary indicator?
Note disclaimers at bottom of prior post.
GMI: 6; Sell in May?
The GMI remains at a maximum of 6. There were 272 new highs on Friday in my universe of 4,000 stocks. Friday was the 8th day in the current QQQQ short term up-trend. The weekly charts of the major indexes show a market trying to regain the ground lost in the big February decline. However, this rebound is coming on relatively less volume than the preceding decline. If the rise of the QQQQ fails to exceed the February top of 45.55 , we could see a major decline. We are getting very close to the "sell in May" period. But it pays to remain patient and to react to events, not anticipate them in advance.
The GMI remains at 6. 71% of the Nasdaq 100 stocks closed on Thursday above their 30 day averages, the largest percentage since February 22. It will be interesting to see how stocks react to earnings as they are released later this month.