For the first time since June 21, there were more than 100 (104) new 52 week highs in my universe of 4,000 stocks. In addition, 73% of the stocks that hit a new high 10 days ago closed higher on Tuesday than they did 10 days before, showing strength in stocks hitting new highs. While the GMI rose to 3 (of 6) all 4 of the more sensitive indicators in the GMI-R are now positive, yielding a GMI-R of 7 (of 10). The Worden T2108 Indicator is at 60%, indicative of a rising, but not overbought, market. And the QQQQ closed slightly above its 10 week average, breaking a run of 11 weeks below that critical level. What is the major negative? The 10 and 30 week averages are still in down-trends, reflecting a potentially serious down-trend.
Given these conflicting signals, it is time for me to move my stops very close on my short positions and to remain mostly in cash. It remains to be seen if the indexes can hold on to these critical short term technical levels through the close on Wednesday. If they can, I will slowly wade back into the market on the long side. It is critical not to marry a particular market scenario and to be ready to adjust quickly to a significant change in trend.
By the way, my very wise stock picker friend, Judy, took small long positions in APKT and ARMH on Tuesday. Judy buys stocks based on the concept behind the business and her own technical analysis methods and frequently buys a stock before my technical indicators signal a buy.
Many indicators are at an inflection point.
If recent history repeats itself however, we will have a week of strong selling.
The key is to respond correctly when the market fails to behave as you expected.
DR Wish and I actually talked about 4 stocks I liked long. He mentioned those two as I had just bought them. The other two I said I was looking at Wednesday am as both required options portions, and it was too late (after 4 for options) CRUS looked like it would probably be extended, and could be purchased with selling a covered call. I like to do covered calls on peaks of emotion, and then either they expire worthless, or loose at least 50% value and then I buy back. SNDK looked like a great candidate for a cash secured put (August ) as they report after earning Thursday, and I expected upside today . Yes I agree the market is iffy and is keeping me more conservative.
My ear is always to the ground.
I’m enjoying the “Profit with Cramer” ad.
A stock exchange is an entity which provides “trading” facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.