GMI: +2; Holding cash

The GMI is +2 and we are in the second day (D-2) of the new QQQQ down-trend. I will wait to commit funds Gmi0707 until after earnings season.  Since 5/15, only 27% of the IBD 100 stocks listed on that date and 34% of my universe of nearly 4,000 stocks have advanced at all.  With odds like these I should only be short or in cash.  My scan of the market yielded 16 rocket stocks and 384 submarines.  Only 2 IBD 100 stocks (PMTI, CME) from the list on 5/15 hit a new high on Friday.  It would be insane to chase growth stocks and anticipate new highs in this market.

Please send your comments to:  ewish@comcast.net.

GMI:+2; D-1?; Staying in cash

The GMI fell to +2, with the initiation of a possible new short term down trend in the QQQQ.  Gmi0706 48% of the Nasdaq 100 stocks rose on Thursday, along with 54% of the S&P 500 and 63% of the Dow 30 stocks. However, there were only 80 new highs and 49 new lows in my universe of nearly 4,000 stocks.  39% of the stocks in my universe and 78% of the IBD 100 stock list on 5/15 are in a bullish stage 2 up trend.  However, 83% of my universe of stocks (93% of the IBD 100 list) closed above their MACD signal line, suggesting an upward trend in most stocks. Only 55% of the IBD 100 stocks from 5/15 advanced on Thursday compared with 58% of my universe of stocks.  Only four of the IBD 100 stocks from the list on 5/15 hit a new high:  EZPW, HOC, HANS and PMTI. Only 31 of the IBD 100 stocks from 5/15 closed higher Thursday than they did on 5/15.  The market has not yet tipped its hand.  I think this is a time for staying in cash.

Please send your comments to:  ewish@comcast.net.

GMI: +3

GMI fell one to +3 on Wednesday.  Gmi0705

GMI: 4; GMI-S: 81; U-2; New IBD 100 leaders

The market continued to strengthen during the brief pre-holiday session. The GMI is at +4 and very close to +5 when/if the IBD growth mutual fund index turns positive.    The GMI-S is now 81, reflecting strong short term up-trends in the major indexes.  73% of the Nasdaq 100 stocks rose on Monday, along with 72% of the S&P 500 stocks and 83% of the Dow 30 stocks. Gmi0703There were 117 new highs and only 19 new lows in my universe of nearly 4,000 stocks.  13/16 stocks that hit a new high 10 days ago closed higher on Monday than they did ten days ago.  Thus, buying stocks hitting new highs has likely to have been profitable again.  35% of stocks are in an up-trend now, up from 9% on June 20. Monday was the second day in the current QQQQ up-trend.

IBD 100 growth stocks are now out-performing other stocks.  Ibd0703    81% of the IBD 100 stocks from the list on 5/15 advanced, compared with 72% of other stocks.  81% are in a bullish stage 2 up-trend and 81% closed above their critical 30 day averages.  34% of these stocks are now above their closing price on 5/15 when they were listed among the IBD 100.  Eight of these stocks hit a new high on Monday:  OII, EZPW, CLDN, XPRSA, HOC, FORM, LIFC, EXPD (I own one of these).  William O’Neil writes that the first stocks to break out of bases to new highs often become the leaders of a new bull move.  I am watching these stocks very closely….

Please send your comments to:  ewish@comcast.net.

GMI: +4; U-1; Looking for longs

The GMI rose to +4 on Friday. The IBD growth mutual fund index is now above its 200 day average and closing in on its key 50 day average. Gmi0630 When these mutual fund managers make money in growth stocks, the odds are good that I can. There were 137 new yearly highs in my universe of nearly 4,000 stocks on Friday.  Friday was the first day in the new QQQQ up-trend (U-1).  The IBD 100 stocks are also coming back.  76% closed above their 30 day averages and 90% are above their MACD signal lines. Ibd0630  29% of the stocks on the IBD 100 list from 5/15 are now higher than they closed on that day. Eight of them hit a new high on Friday:  IBCA, CLDN, LVS, XPRSA, GRMN, HOC, OII, EXPD (I own some of these)……

I am slowly wading into the market on the long side.  It remains to be seen whether this rally will hold.

Please send your comments to:  ewish@comcast.net.

GMI: +1; Too early to tell; 6 IBD 100 new highs

The GMI rose to +1, but it is too early to tell if this reversal will hold. Two other indicators are too close to call (?).  Next week should provide more clarity, after end of quarter window dressing is over and new earnings are anticipated.  96-100% of stocks in the QQQQ, SPY and DIA indexes rose on Thursday.  There were 96 new highs and 48 new lows in my universe of nearly 4,000 stocks.  Gmi0629 There were 6 new highs in the IBD 100 list from 5/15:  GRMN, EXPD, LVS, CLDN, LIFC, OII.  If this turn is for real, these stocks may be among the new leaders.

Please send your comments to:  ewish@comcast.net.

GMI: 0; Minimal changes

The GMI remains at zero.  Wednesday was the 34th day in the current QQQQ down-trend. Gmi0628

GMI:0; 5 Rockets, 433 Submarines; Watch your cash balances

The GMI is still zero.  Between 10-13% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose on Tuesday.  There were 28 new highs and 149 new lows in my universe of nearly 4,000 stocks.  Gmi0627_1 None of the GMI-S (short term) indicators are now positive.  A scan of my universe of stocks yielded 5 Rockets and 433 Submarines.  Thus, finding good shorts is 80x more likely than finding possible longs.  Tuesday was the 33rd day in the QQQQ down-trend. The IBD 100 stocks did as badly as my universe of stocks.  Ibd0627 There were only 2 highs among the IBD 100 stocks listed on 5/15.  Only 16 of them closed higher on Tuesday than where they closed on 5/15 when the list was published….. 

This is a good time to be short or in cash.  As I noted a few weeks ago,make sure your cash balances are swept into a high yielding money market fund.  Fidelity brokerage IRA accounts automatically are swept into the Cash Reserves fund paying almost 5%, but many of the other deep discount brokers pay their customers minimal interest while they invest your funds at much higher interest rates for themselves.  I have been told that some of these brokers will let you manually transfer your funds to a better paying fund, if you are smart enough to ask for it…..

Please send your comments to:  ewish@comcast.net.

GMI: 0; 3 IBD 100 new highs; New ETF’s to short indexes–a bullish sign?

The GMI remains at zero, but there were almost enough successful  new highs from 10 days ago (9/15= 60%) to turn this indicator positive.  While I typically call this index positive when 50% or more of the stocks that hit a new high 10 days ago close higher then they did 10 days ago, the numbers here are too small to do so. If it is above 50% again tomorrow, I will make the indicator positive.  Gmi0626 There were 36 new highs and 95 new lows in my universe of nearly 4,000 stocks.  65% of the Nasdaq 100 stocks advanced on Monday, along with 74% of the S&P 500 and 80% of the Dow 30 stocks. Monday was the 32nd day of the current QQQQ down-trend. 14% of the stocks in my universe are in an up-trend, compared with just 9% at the lows last week.  So stocks are getting stronger.

The IBD 100 growth stocks from 5/15 now look as strong as the stocks in my universe.  This contrasts with the way they acted during the recent decline, when they greatly underperformed other stocks.  Traders and funds were clearly unloading the premier growth stocks in the IBD 100 list.  Ibd0626Three IBD 100 stocks did hit a new high on Monday:  XPRSA, CLDN, OII.  Any of the IBD 100 stocks that could survive the decline of the past month and go on quickly to hit a new high is a stock worth watching.  69% of the IBD 100 stocks from 5/15 have a MACD above their signal lines, indicating growing strength.   Still, note that only 18 of these 100 stocks closed higher on Tuesday than they did on 5/15 when this list was published by IBD…….

There are now new ways for an investor/trader to short the major market indexes in an IRA without buying put options.  Inverse ETF’s have been born.  They move in the opposite direction of the indexes they track.  So, to short the Nasdaq 100 (QQQQ) index, one can buy  PSQ.  Other inverse ETF’s include:  SH (S&P 500); DOW 30 (DOG) MYY (S&P 400 midcap).  These ETF’s are thinly traded and should be researched carefully before buying. 

Maybe the dawn of a new set of inverse ETF’s is a bullish sign.  Typically, not long after investors are so interested in a sector that a relevant new ETF is issued, that sector is close to a top–check out XHB, GLD and SLV for recent examples.  Too many people may be interested in shorting the major indexes??!!  A new contrary indicator?

Please send your comments to:  ewish@comcast.net.

GMI: 0; minimal changes; D-31

GMI is still at zero.  Gmi0623 On Friday there were 24 new highs and 143 new lows in my universe of nearly 4,000 stocks.  33-50% of the stocks in the QQQQ, SPY and DIA advanced.  Indicators are off of their lowest levels of the past few weeks.  Friday was the 31st day (D-31) of the current QQQQ down-trend.  We have completed 7 weeks with the QQQQ below its 10 week average.  It will take some time for the trend to reverse.  I remain mainly in cash with a few put options in my IRA.

Please send your comments to:  ewish@comcast.net.



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