The GMI and GMI-R remain at zero. Thursday was the eleventh day in the current QQQQ short term down-trend. There were 30 new highs and 578 new lows in my universe of 4,000 stocks on Thursday. A lot of the new highs are being achieved by bond funds and the new inverse ETF’s that rise when the market falls. Still, the number of new lows is a lot less than the 730 and 1,011 registered on January 8 and 9. So the current decline is not driving as many stocks to new 52 week lows. The Worden T2108 indicator is at 21%, still above the level reached in recent bottoms. The decline last August ended with the T2108 at 7.7% and the decline in June, 2006 ended with it at 13.6%. T2108 is the percentage of NYSE stocks that closed above their 40 day moving averages…….
I made money today in the declining market as my put options gained. I remain largely in cash though, given that the market could bounce strongly at anytime. When the GMI rises to around 3, I will consider going long again, or I will add to my shorts after a failed rally. Remember, no one can consistently predict when a trend will end. We just have to wait for the turn to manifest itself.
Dr. Wish,
Will you short individual stocks if this market turns into a bear? Or will you stick with Puts and ETF’s to get your short exposure?
Thanks for the excellent blog!