My short term indicators are coming back, although we are not out of the woods yet. The GMI is now at 2 and the more sensitive GMI-R is at 5 (of 10). The QQQQ short term down-trend ended after 21 days, and an up-trend has begun. However, there were only 11 new highs and 17 new lows in my universe of 4,000 stocks on Wednesday. When the QQQQ is in a short term up-trend, I buy QLD (the Ultra long Nasdaq100 ETF) and look for growth stocks.
Some of the stocks I have written about have came back to life, including TSYS, AMZN and NFLX. I own some of these. I ran my “Darvas” TC2007 scan, looking for stocks that would meet the criteria that he used to select growth stocks. Among the 11 Darvas stocks in my 4,000 stock universe are six that have also been on the IBD100 lists during the past year: NFLX, SNDA, GMCR, QSII, LINC and SXL. I especially like NFLX, GMCR and QSII because they are close to their all-time highs, which was a major requirement used by Darvas when he traded his way to two million dollars during a 2 year period in the late 50’s. There is no guarantee that these stocks will do well, but I like to make pilot buys in such stocks, put in a stop loss, and then let the market tell me which, if any, will be winners. I then slowly buy more of the winners. To do well in the market, one has to keep the many losses small and pile into the few big winners.