The GMI and GMI-R remain at zero. There were 3 new highs and 671 new lows in my universe of 4,000 stocks on Wednesday. The indexes I follow remain in solid down-trends and I made a little money in my IRA as my put options increased in value…..
I have been going to trader meet-up groups the past three years and had noticed that attendance was sometimes a good contrary indicator at market tops and bottoms. When few people attend the meeting it often signifies disgust with the market and a possible bottom. Last night we had the largest attendance ever, an ominous sign to me. When I mentioned this to the group they all laughed, which I interpreted to mean that they did not think the market was in for a further decline. Many of the new attendees were noticing the volatility of the market and wanted to find ways to profit from it. Could it be that as long as we have lots of people looking for opportunities, this market will not bottom? Capitulation (and bottoms) usually occurs when people want no part of the market. Moreover, when I look at this monthly chart of the QQQQ, I see a market that may be closer to the beginning of a decline than to the end.
Note that the shorter term moving average (dotted line) has just crossed below the longer moving average (red line). In contrast, the 2000-2002 market spent two years with this short moving average declining below the longer average. Maybe we should get ready for a long decline and stop trying to find a bottom. What do you think?