Stealth bull market? GMI: +4; Pressure off short rates

Stealth bull market?  The indexes are concealing a strengthening market.  There were 353 new highs Thursday, the highest since July 29.   The GMI rose to +4 because 57% of the 63 stocks that hit a new high 10 days ago closed higher on Thursday than 10 days earlier.  With the increasing number of stocks hitting new highs, this indicator will also be over 100 soon.  56% of stocks closed above their 10 week average, the most since August 15.  37% of the Nasdaq 100 stocks rose on Thursday, 51% of the S&P 500 stocks and 43% of the Dow 30 stocks.  29% of stocks are in a short term up-trend, the most since August 15.  28% of the 4,000 stocks in my universe are within 5% of their 52 week highs.  Since Katrina arrived on Monday, 8/29, through Thursday’s close, 70% of the stocks in my universe have advanced………………….. 

In my last post, I showed you that the longer term interest rates were falling and continuing a several week decline.  Take a look at the chart of the very short term interest rate indicator. For the first time since last May, this index is below its 30 day average (red line, click on to enlarge), suggesting that speculators think that the Fed may relieve the pressure on interest rates.  All we need now is an announcement from the Fed to that effect, for the stock markets to skyrocket. On the other hand, such a move would signal to all that the economy is critically weak………………….

So, I am accumulating good stocks.  I am being cautious and wading in slowly.

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