GMI: +4; Not much change; On the side lines

The GMI remained at +4 after Monday’s trading.  There were 167 new highs in my universe of 4,000 stocks.  Gmi0206 48% of the Nasdaq 100 stocks rose along with 57% of the S&P 500 stocks and 43% of the Dow 30 stocks.  The GMI-L and GMI-S were unchanged. Monday was the second day (D-2) of the short term QQQQ decline.  Still 68% of stocks closed above their 10 week averages, but only 52% were in a short term up trend.  The market remains in a short term decline with the longer term indicators still pointing up.  This is the  time for me to be on the side lines in my trading account………………


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1 thought on “GMI: +4; Not much change; On the side lines”

  1. Hey Eric…. I ran across this old email tonight and thought I’d post part of it. It was in answer to a comment you made in an email to me back on July 22nd 2005 that RESC looked “sick”.lol Look at some of the charts of stocks I mentioned in this email. HURC, GGB, RES, STLD, IIIN, NSC, BNI, CXS Hell, I need to start my own blog don’t I?….hehehe

    Partial Email sent to you on 7/22/05….

    Hey Doc …. RESC “ain’t” sick. was just a tad over-sold (up 8% today). I buy from RESC (and they are also one of my customers, I know them well) and every rolling is sold out 60-90 days ahead of the rolling date. They are basically keeping NO INVENTORY! everything is pre-sold before rolling …. (Basic) Steel stocks are about to rally. Watch these mini-mill operators GGB (A bargan today!),RESC,STLD,SCHN…. Gotta have steel to build the economy. Alloy and nonferrous metals are already ahead of the curve (USAP, ATI, TIE) …. Keep an eye on the “fabricators” too (MUSA,ROCK,*IIIN) …. For what it’s worth…. My Mfg Co’s (received) PO’s from the “Railways” (track work components) has increased remarkably within the past 4-6 months. Rail is an ever-popular way to move freight (fuel costs, etc) … I think the rail operators are due to run?… NSC (local company),BNI,KSU,CSX… This industry’s growth also says much about the economy.

    I have been in the metals Mfg business since the late 70’s and (founded) owned my own mfg company since 1985 (CNC machining and steel fabrication). I gage the overall economy by how my own business’ are performing. We hit a brick wall 3rd qtr. 2000 (after years of growth) …. We down sized …. business was flat till 3rd qtr 2003 (spent very little on capitol equipment for 3 1/2 years). Last year was pretty good … We’ve seen backlog significantly increase this year (2005). Now we are experiencing record sales, record profits, record backlog, hiring again …. We’re buying new CNC machinery again (watch HURC). The “Mfg recession” was instrumental in “taking out” some weak competitors which helped us. BUT…. I see this economy solidly growing again and with very little debt so are we. I remember the (true) growth periods in the 80’s and 90’s …. It feels like that again to me. I’m bullish, but not irrationally exuberant. Remember: there are many good publicly traded companies in the same position as my little company. I like the way this market is acting …. It will run up a little then rest, money will shift from small caps into large caps (buying opportunity) then cycle repeats… All the time many analyst are bearishly cautious while others are “like Crammer”. I see a balanced growing economy, that’s not on fire …. but solid.

    Jim B.

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