My Daily SPY Index turned negative on Wednesday, bringing the GMI to 3 for the first time since it was below 4 on March 19. (I posted "3?" on one day since then but I subsequently corrected it to 4 because I had jumped the gun on one indicator that required 2 days down before turning). The short term GMI-S is now 38. The Worden T2108 indicator is 31, still not in the range of past market bottoms, typically below 25.
I am content to remain in cash for now. By following my gut I did miss out on further gains in GRMN and AAPL, but I am coming away with almost all of my profits from the past three months. I am fortunate that many of my holdings were called away on Saturday because this week’s decline has hit these stocks hard.
I always play the odds, and the risk of being long appears to me to be too high for now. The SPY and IJR look very weak, but the QQQQ and DIA are behaving relatively stronger for now. Two daily closes of the QQQQ below 48.50 and the DIA below 136.30 would signal an imminent decline. Perhaps it would be best to just take August off, as many traders do. After earnings are out there will be little good news to propel stocks higher. And that ominous September-October period is just around the corner.
Please see my disclaimers on my prior post.