Dr. Wish

GMI: 0; GMI-R: 0; QQQQ short term down-trend: 51; New Global Dow Index

@ 6:13 am

My general market indicators remain at zero, and the QQQQ finished the 51st day of its short term down-trend.   There were 3 new highs and 458 new lows in my universe of 4,000 stocks on Tuesday.   This is not the time to buy stocks at new highs in the hopes of seeing them continue to a series of new highs.   One of the key GMI indicators is positive when 100 stocks hit a new 52 week high in the prior day.   The last time this occurred was on September 19 (at 319).   The GMI has been 0 or 1 since September 2, during which the QQQQ has declined 33.9%.   Since September 2, 95 of the NASDAQ100 stocks declined, and 39% have declined between 40%- 81%.   RIMM, one of the darlings of the prior bull rise, is now down 61% since September 2nd.   One fights the general market trend at his/her own peril.   When the trend is down, I go to cash or go short…..

As a sign of the times, a new Global Dow Index of 150 large companies around the world has just been launched.   Now we can more easily track the global market carnage as it occurs……..

GMI: 0; GMI-R: 0; 49th day of QQQQ short term down-trend; Worden T2108: 15%: EBS goes higher

@ 12:01 am

The GMI and GMI-R remain at zero and the QQQQ completed its 49th day of its short term down-trend on Friday.   There were 5 new highs and 173 new lows in my universe of 4,000 stocks on Friday.  GMI1107

Nevertheless, there is a lot of strength in the underlying technicals.   More than 90% of the NASDAQ100 and S&P500 index component stocks now have their MACD above its signal line.   This a sign of a possible reversal in these stocks.   And a third of the DOW30 stocks have their 10 day average above their 30 day average, the highest percentage since September 22nd, and up from   0-3% for most of October.   The Worden T2108 Indicator is now at 15%, up from under 1.2% on October 9.   Only 1987 had a lower value, 0.47% on October 20, 1987.   (Worden data on T2108 goes back only to September, 1986.)   So, it looks like we are off of the bottom.   Now we need the major indexes to hold above their October lows to indicate a bottom is in place….

I remain mainly in cash and a little short. I continue to watch EBS, whose break-out I first noted with a chart in my post on October 16, with the stock at 16.66.   It hit a new high again last week and closed at $20.33.   This is the type of explosive stock at an all-time high that I like to buy in a rising market.   So I will watch it and might purchase it when the GMI climbs to 3 or above.   By the way, 2 of the 5 stocks that hit a new high on Friday were on the IBD100 list, AFAM and EBS……