The GMI is still at a maximum of 6. There were 364 new yearly highs in my universe of 4,000 stocks. 63% of the Nasdaq 100 stocks advanced on Wednesday, along with 58% of the S&P 500 and 70% of the Dow 30 stocks. 58% of the IBD 100 list stocks from 10/16 rose and 14 of these stocks hit a new high. Wednesday was the 48th day in the current QQQQ up-trend.
One of the reasons I was confident of a continued rise in the QQQQ is that the put/call ratio on Tuesday was a high .97. This means that 97 puts were traded for each 100 calls. Put options are bets on a stock’s decline while call options are bets on a rise. Option traders tend to be wrong at the extremes. A put/call ratio near 1.00 is a high reading and often correlated with a rise in the market. When many people bet on a decline, the market often rises. It is noteworthy that when this market shows any sign of weakness, many people bet on a further decline. Skepticism of the market’s rise tends to be bullish. You can find the put/call ratio each day in IBD in a small chart inside the S&P 500 chart on the General Market page…….