Well, the GMI and GMI-R continue to register zero. There were 500 new lows in my universe of 4,000 stocks on Tuesday, and 28 new highs. On January 9, there were 1,011 new lows, so the current decline has not created as much damage thus far. Nevertheless, since the start of this down-trend on January 3, the Nasdaq 100 index has fallen 8% and 83% of the Nasdaq 100 stocks have declined, 31% have declined 10% or more. Ten of the stocks have fallen 18% or more, including past leaders such as RIMM, ISRG and GRMN. You can see why it does not pay to fight the trend of the index (QQQQ). It also shows the wisdom of using stop loss orders to preserve gains. When the leaders like GOOG (-7%) and even AAPL (-13%) begin to falter it presents ominous signs for the rest of the market.
Nicolas Darvas was right when he wrote that it is folly to remain in a bear market and to thereby surrender one’s precious bull market profits (see my post on Darvas on last Monday, 1/14). And what did Cramer say to his viewers tonight about the market? Because there has never been a 20 year period when the market did not gain, people should remain in the market! So, we should all stay in this market knowing that our money will probably be worth more in 20 years—masochists rejoice!