The GMI remains at the maximum +6, and has been an excellent indicator of the market’s primary direction. There were 158 new highs in Friday’s shortened session, down from 351 on Thursday. Much of the pre-rally gloom seen in mid-October has dissipated. Friday was the eighteenth day in the QQQQ up-trend (U-18). Between 55-63% of the Nasdaq 100, S&P 500 and Dow 30 stocks advanced on Friday. 60% of the 4,000 stocks in my universe are in a short term up-trend and 69% closed above their 10 week averages. 27% of stocks are within 5% of their 52 week highs.
The WPM also shows improvement in the stocks of all five market indexes. 80% or more of the stocks in these indexes closed above their 30 day averages, and 70% or more closed above their 30 week averages. The only exception was the S&P small cap stocks (63% above their 30 week). Again, the small stocks are lagging the others. ………………………..
While the markets are strong, none of these statistics can tell us when this rally will end. Trend followers, by definition, follow the trend–they do not lead it. We will therefore have to give up some of our profits before we discern a change in trend and sell out. This is the price we pay to avoid selling too soon in the hope of getting a larger gain.
NOTE: A NEW SECTION TO THE BOTTOM RIGHT PROVIDES LINKS TO MY FAVORITE PRIOR POSTS. THESE INCLUDE MY STRATEGY POSTS, DEFINITIONS OF THE GMI COMPONENTS, AND MY ANALYSIS OF WHY THE TRADING TECHNIQUES OF THE GREAT NICOLAS DARVAS WORK BEST DURING BULL MARKETS AT ALL-TIME HIGHS.
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