The market continued to weaken on Tuesday. The large caps were stronger than the techs, but not by much. 27% of the Nasdaq 100 stocks rose, along with 31% of the S&P 500 and 43% of the Dow 30 stocks. While 29% of my universe of 4,000 stocks rose, only 23% of the IBD 100 list from 5/15 rose. Thus, even the growth stocks declined on Tuesday. Tuesday was the 24th day in the current QQQQ decline. There were only 76 new highs and 98 new lows in my stock universe. Only 16% of stocks remain within 5% of a new high, while 11% are within 5% of a new low. Only 37% of my universe of stocks closed higher on Tuesday than they did on 5/15. With such odds, one should be short or in cash.
My market indicators have weakened, although the large cap stocks (DIA, SPY) remain in an up-trend. The GMI-S is now 50. I am content to remain mostly on the side lines, although on Tuesday I did buy put options on a former high flyer that appears to be topping. When you look at SBUX and HANS and WFMI, you can see how the market has turned against the bull market winners. Even NTRI and NDAQ, and do I dare say, GOOG, are beginning to look sick. This is not the time to hang onto stocks with big gains that are starting to look tired…….
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