GMI: 1; GMI-R: 4 T2108: 61%


The GMI rose to 1 (of 6)   and the more sensitive   GMI-R to 4 (of 10).   There were 5 new highs and 21 new lows in my universe of 4,000 stocks on Wednesday.   The QQQQ will change to a short term up-trend, if it holds on Thursday.   I sold my QID and bought a little QLD.   I will accumulate QLD (the ultra long QQQQ ETF) if the up-trend gets going. The key is to start with a small pilot buy and to increase my position only if the trend continues. I also set close stops in case the trend weakens.   In this way I have the greatest position (and risk) only after the movement is consistent with my initial   purchases.   I learned this strategy from the great Jesse Livermore (see Reminiscences book by Lefevre below), who made small pilot buys and then pyramided up only if the market confirmed his judgment. I never add to a losing position.   I hope to get in on a trend that will last for weeks or months, not minutes or days.

4 thoughts on “GMI: 1; GMI-R: 4 T2108: 61%”

  1. Dr Wish,

    Regarding your post, when place close stops on a position–how close is ‘close’?
    Do you use a percentage? Just curious.
    Great web site by the way.

  2. Jan 30th is quite a reversal day, but the previous day was a huge overbought run-up. My sentiment indicators nearly went off the charts warning of a short-term pull-back. And it did happen, almost on cue. But the one day sell-off didn’t seem to push the sentiment indicators into oversold territory.

    Except for some Nasdaq issues, most of NH/NL are still anemic. Did you notice that the leading stocks such as AVAV and ASEI were selling off as the market surged on the 29th? Very interesting.

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