Dr. Wish

The markets showed some life on the last days of trading for 2008.

The GMI remains at 2 (of 6), but the more sensitive GMI-R is now a 6 (of 10). The last time the GMI-R was at 6 was on August 28.   And the Worden T2108 indicator is now at 72%, not far from the 80% level where advances tend to end.   The last time the T2108 was this high was last May, before the start of the summer swoon.   However, in June of 2003 when the market took off after the 2002 bottom, the T2108 did get up to 92+ during the first market rebound.   So this rise could have more to go.   Meanwhile, there were more new highs than lows (26 vs. 24) in my universe of 4,000 stocks on Wednesday.   The last time new highs exceeded new lows was September 2nd, just before the market fell off of a cliff.   The QQQQ completed the 16th day of its current short term up-trend on Wednesday. So, the market technicals have strengthened considerably. I am ready to nibble a little, but would prefer a GMI over 3 to really wade in…..

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The Worden T2108 Indicator is now at 61%, the highest reading since August 28.   This means that 61% of NYSE stocks closed above their 40 day moving averages.  This reading places this market pendulum close to the area where tops have occurred (above 70%).   There were 11 new highs and 65 new lows in my universe of 4,000 stock on Tuesday.  Among the new highs were 5 stocks that have appeared on some of the IBD100 lists I have followed the past year:  SJI, SXCI, INSU, ROCM and SHEN.  (I own some of these.)  These stocks should be monitored for potential market leaders if this rally continues. The QQQQ has completed the 15th day of a short term up-trend. Happy New Year to all!