There were only 3 new highs and 460 new lows in my universe of 4,000 stocks on Monday. Monday was the 55th day of the current QQQQ short term down-trend. Since the first day of this down-trend on September 2nd, the QQQQ (Nasdaq 100 index ETF) has declined 37.7% and 99 of the 100 Nasdaq 100 stocks have declined, 52% have declined more than 40%. Do you see the folly of fighting the primary trend of the index? 99% of the stocks declined! Do you know how many persons are still looking for stocks to BUY??!!! In a down-trend one should be in cash or short. During this same period, the ultra inverse QQQQ ETF, QID, has advanced 87.5%. Now, that’s the way to play a down-trend!
The Worden T2108 indicator (% of NYSE stocks above their 40 day moving average) is at 11%, still in bottom territory. The QQQQ completed the 54th day of its short term down-trend on Friday. Only 68% of the NASDAQ 100 stocks have a MACD above their signal line, down from 94% a week ago. So the technicals have weakened somewhat. I see no reason to change my strategy from remaining mostly in cash with a few select shorts.No tags for this post.
My two general market indicators remain at zero. Among the 4,000 stocks in the universe I follow, 8 touched a 52 week high and 1,090 hit a new low on Thursday. The last time we had more than 1,000 new lows was on October 24th, at the October low (1,576 lows). Whether the market can hold Thursday's lows will tell us a lot about the probable continuation of this down-trend. Meanwhile, the key is not to anticipate a bottom but to wait for one to be in place. Since we got out of this market months ago, we have plenty of time to go long again, far below our exit prices……………….No tags for this post.
On Wednesday, there was one new high and 773 new lows in my universe of 4,000 stocks. The GMI and GMI-R remain at zero. The T2108 indicator is now back to 9%. I remain in cash and a little short.No tags for this post.
My general market indicators remain at zero, and the QQQQ finished the 51st day of its short term down-trend. There were 3 new highs and 458 new lows in my universe of 4,000 stocks on Tuesday. This is not the time to buy stocks at new highs in the hopes of seeing them continue to a series of new highs. One of the key GMI indicators is positive when 100 stocks hit a new 52 week high in the prior day. The last time this occurred was on September 19 (at 319). The GMI has been 0 or 1 since September 2, during which the QQQQ has declined 33.9%. Since September 2, 95 of the NASDAQ100 stocks declined, and 39% have declined between 40%- 81%. RIMM, one of the darlings of the prior bull rise, is now down 61% since September 2nd. One fights the general market trend at his/her own peril. When the trend is down, I go to cash or go short…..
As a sign of the times, a new Global Dow Index of 150 large companies around the world has just been launched. Now we can more easily track the global market carnage as it occurs……..No tags for this post.
The GMI and GMI-R remain at zero. There were 5 new highs and 250 new lows in my universe of 4,000 stocks on Monday. Monday was the 50th day of the current QQQQ sort term down-trend. I remain in cash and a little short.No tags for this post.
Nevertheless, there is a lot of strength in the underlying technicals. More than 90% of the NASDAQ100 and S&P500 index component stocks now have their MACD above its signal line. This a sign of a possible reversal in these stocks. And a third of the DOW30 stocks have their 10 day average above their 30 day average, the highest percentage since September 22nd, and up from 0-3% for most of October. The Worden T2108 Indicator is now at 15%, up from under 1.2% on October 9. Only 1987 had a lower value, 0.47% on October 20, 1987. (Worden data on T2108 goes back only to September, 1986.) So, it looks like we are off of the bottom. Now we need the major indexes to hold above their October lows to indicate a bottom is in place….
I remain mainly in cash and a little short. I continue to watch EBS, whose break-out I first noted with a chart in my post on October 16, with the stock at 16.66. It hit a new high again last week and closed at $20.33. This is the type of explosive stock at an all-time high that I like to buy in a rising market. So I will watch it and might purchase it when the GMI climbs to 3 or above. By the way, 2 of the 5 stocks that hit a new high on Friday were on the IBD100 list, AFAM and EBS……
Both of my General Market Indicators are zero again. There were 3 new highs and 189 new lows in my universe of 4,000 stocks on Thursday. This was the highest number of new lows in the past 7 days, but was far less than the numbers reached in the prior decline (over 1,000 new lows per day). I therefore remain mainly in cash with a few short positions. The key to the short term is whether the QQQQ (now at 30.59) can hold these levels and rally to close above 34 in the next few days. A strong rally from here would be very bullish. However, trend followers follow the trend and do not act until a reversal has occurred.No tags for this post.
Again, there were no changes in my general market indexes. The major indexes bounced down off of their declining primary moving averages. Once this happens, it is a sign that the short term rally is over and the decline will continue, unless we get a close above these moving averages today. The key to this market is the quality of the next decline and whether the bottom will hold. If it doesn't, the panic selling may return. There were only 3 new highs and 50 new lows in my universe of 4,000 stocks on Wednesday. The T2108 is back to 15%. The place to be for me now is in cash or a little short.No tags for this post.
No major changes in my general market indicators. However, the Worden T2108 indicator climbed to 20%, the highest since September 26. There were 9 new highs and 34 new lows in my universe of 4,000 stocks on Tuesday.No tags for this post.