Both the GMI and GMI-R remain at zero. There were 18 new highs and 45 new lows in my universe of 4,000 stocks on Friday. Only two (PRXL, ISYS) of the 509 stocks on the IBD100 lists I tracked the past year hit a new 52 week high on Friday. Growth stocks are just not climbing to new highs. There is no reason to be long growth stocks in this market unless I just want to gamble and try to fight the tide. Friday was the 16th day (D-16) of the current QQQQ short term down-trend. While my most sensitive daily indicators are off of the extreme low values they hit early last week, none of my indicators have turned positive. Trend followers catch the up-trend after it has developed. I am content to wait for a true bottom and a subsequent up-turn before I wade back into this market. Many of the bear markets I have witnessed back to the 70’s continued for nine months or more. We are only a little more than two months into the current decline…….
Over the past 40 years, I have rarely found a book on trading that made a significant difference to my approach to trading. I have listed those few books to the lower right of this page. (I earn no money off of any sales of the books I mention and receive no income from this blog.) Well, I recently read a book that I will list with the others. Michael Covel’s new book, "The Complete Turtle Trader," is a masterpiece in describing the trading philosophy and rules used to train the famous Turtles, who learned how to make millions trading, in a two week course taught to them by Richard Dennis and William Eckhardt in the 80’s. The most important thing I learned from this book was the mentors’ primary emphasis on exits from a trade rather than entry. Dennis is quoted as basically saying one might profit by selecting positions by trial and error as long as one had a good exit strategy. Go into every trade as if you will lose money and you will be prepared in advance for that possibility and limit your losses. Don’t take my word for this, read the book. The turtles used an extremely systematic and innovative set of rules to trade futures, which I think can be adapted for trading equities. This is a good time to be out of the market, to analyze one’s prior trading performance and to, perhaps, read a great book….