GMI: 2; GMI-R: 3; QQQQ in short term down-trend

The GMI is now 2 and the GMI-R is 3.  The QQQQ has now met my criteria for a short term down-trend.  I am mainly in cash.

GMI: 4; GMI-R: 5; QQQQ weakening; Mainly in cash

The  GMI is now 4 (of 6) and the GMI-R is 5 (of 10).  There were 67 new highs and 186 new lows in my universe of 4,000 stocks on Monday.  The QQQQ appears to be breaking.  I am mainly in cash.

GMI:5; GMI-R: 6; Split market continues; BAC-plunging banks

The GMI is 5 (of 6) and the GMI-R is 6 (of 10).  The GMI-R counts 4 additional short term indicators not counted in the GMI. Gmi0606

The fact that the GMI-R is only 6 of 10 reflects the weakening in the QQQQ.  Hard to believe, the QQQQ and IJR (small-caps) remain in up-trends even as the SPY and DIA remain in solid down-trends.  There were 115 new highs and 116 new lows in my universe of 4,000 stocks on Friday.  However, only 44% of the Nasdaq100 stocks closed above their 30 day averages, down from over 80% in mid-May.  And only 53% of the 4,000 stocks in my universe closed above their 10 week averages. The Worden T2108 indicator is now at 50%, down from 77% in early May, but far from the area where bottoms tend to occur (below 15%).

Last week I transferred all of my pension money from mutual funds into money market funds.  When I looked at how most of the Dow 30 stocks are  doing, I became very concerned of the future of that index and the general market.  Only 8 Dow stocks closed Friday above their critical 30 week averages, and 3 of these 8 are within only one point of falling below that average.  A stock below its 30 week average is likely in a down-trend and I never buy a stock trading below its 30 week average. Only 32% of the S&P500 stocks and 42% of the Nasdaq100 stocks closed one or more points above their 30 week averages. Most important, the SPY and DIA index ETF's themselves are both below their declining 30 week averages.  The QQQQ's 30 week average is also declining, but that index closed above that average, for now.  So, I remain largely in cash and have written covered calls on most of my long stock positions.

The major bank stocks look especially weak. BAC

Look at this weekly chart of  Bank of America (red line= 30week average; click on chart to enlarge). Other bank stocks with similar charts include : WB, UBS, STI, and DB.  When major bank stocks are in a free-fall, can the rest of the market be far behind?

GMI:3; GMI-R:6 51st day of QQQQ up-trend

The GMI is 3 and the GMI-R is 6. There were 71 new highs and 86 new lows in my universe of 4,000 stocks on Wednesday.  Wednesday was the 51st day of the current QQQQ up-trend.

GMI: 3; GMI-R: 6; NASDAQ100 weakening; hedging bets, own SOHU

The GMI and GMI-R are unchanged, but the internals are weakening.  There were  90 new highs and 81 new lows  on Tuesday in my universe of 4,000 stocks.  I wrote calls on my growth stock holdings and hold options on DXD. I am waiting for a strong bounce at the end of the quarter in late June to get out of my remaining longs. A close of the QQQQ below 48.56 (now at 49.13) would trigger a short term down-trend in that index. One stock I like and own–SOHU.

GMI: 3; GMI-R: 6; Split market

The GMI fell to 3 (of 6) and the GMI-R is at 6 (of 10).  The QQQQ continues to outperform the Dow and S&P500 stocks.  This is mainly because the Nasdaq 100 stocks represented by the QQQQ do not contain the financial stocks that are imploding and weakening these other indexes.  There were 81 new highs and 85 new lows in my universe of 4,000 stocks on Monday.  It remains to be seen whether the weakness in these other stocks will eventually spread to the tech stocks.  This is the time to have close stops and to be ready to go to cash and/or short if the GMI breaks down further.

GMI: 5; GMI-R: 8; 48th day of QQQQ up-trend; 19 IBD100 stocks at new highs

The GMI (General Market Index is now at 5 (of 6) and the GMI-R (GMI, revised) is now at 8 (of 10). (Click on table to enlarge.)GMI0530

There were 86 new highs and 41 new lows in my universe of 4,000 stocks on Friday.  The QQQQ has been in an up-trend for 48 days.  Over that time, the QQQQ has risen 10.2% and the ultra long QQQQ ETF, QLD, has advanced 18.9%.  So if one just rode the trend in the QLD, one could have had a very nice portfolio performance, indeed!  I meet so many traders who think they must get in and out of the market and trade every dip.  But as Jesse Livermore wrote over a half century ago, the way to make big money in the market is to determine the change in trend and to ride it until it ends…..

The IBD100 stocks have been doing well lately. The list of stocks on the IBD100 list published on April 7 provides a good example.  In about two months, 67% have advanced, 45% by more than 12% and 32% are up more than 20%.  In fact the top 10 gainers are up 32-94%.  The leader is CLR (+94%), followed by TTES and GHM (+40%) and ISYS (+39%).  Today's new IBD100 list has a lot of promising stocks on it, including 19 which hit a new high on Friday:  ISYS,KSU,WDC,ANSS,SOHU,CLR,NDSN,SQM,FLS,GLF,WFT,
CLHB,HIL,MA,GDI,WTI,DR,GMXR,AXYS.  I bet some of this summer's big winners are on this list…..

GMI: 4; GMI-R: 5; 46th day of QQQQ up-trend; CPST strong

The GMI remains at 4 (of 6) and the GMI-R at 5 (of 10).  There were 61 new highs and 67 new lows in my universe of 4,000 stocks on Wednesday.  Wednesday was the 46th day of the current QQQQ up-trend.  CPST gathers strength.

GMI: 4; GMI-R: 5; QQQQ holds

The GMI held at 4 (of 6)  and the GMI-R at 5 (of 10). The QQQQ held at support and completed the 45th day of its current up-trend. There were 43 new highs and 58 new lows in my universe of 4,000 stocks on Tuesday.  It is critical that the QQQQ hold support the next few days.  If it does, I will retain my position in QLD. 

GMI: 4; GMI-R: 5; QQQQ on support–bounce or bottom?

The GMI is at 4 (of 6) but the GMI-R is just 5 (of 10), indicating that  my short term and most sensitive indicators are weak. GMI0523

The QQQQ is in its 44th day of its up-trend, which is in serious risk of faltering.  A close of QQQQ below 47.77 will likely bring the GMI down. The stocks represented in the SPY and DIA index ETF's are seriously weak already.  There were only 23 new highs and 88 new lows in my universe of 4,000 stocks on Friday.  Less than half (48%) of the Nasdaq 100 stocks closed Friday above their 30 day averages.  This is time to place close stops and to consider moving from QLD into QID.  I am also considering buying puts in my IRA on some declining stocks. This week should tell whether the rise from last March was just a bounce within a larger down-trend, or indicative of a true bottom.

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