Well, the GMI and GMI-R remain at zero. There were only 50 new highs and 372 new lows in my universe of 4,000 stocks on Tuesday. The Worden T2108 indicator is now at 39%; when it falls below 20% I will start looking for a bottom. In the meantime, I am in cash and short. My account went up on Tuesday as my shorts rose. As long as one trades with the trend of the general market it is possible to profit. This was one of the key rules of all of my favorite gurus (Livermore, Darvas, Weinstein, O'Neil, to name a few.) It took me over 30 years to learn this simple truth. Don't let it take you that long. Simply evaluate your trades the past 2 years in relation to the GMI. I know you will find that the big gains came while going long when the GMI is above 3. However, being long when the GMI is less than 3 brings mainly misery and losses. Keep in mind that there are always a few exceptions to the trend in any market. I prefer to trade with the odds in my favor. About 70-80% of stocks follow the market trend. Why look for the 20% that buck the trend when one can trade with the trend and have an 80% chance of success?
Dr. Wish
GMI: 0; GMI-R: 0; 5th day of QQQQ down-trend
The GMI and GMI-R remain at zero. There were 78 new highs and 109 new lows in my universe of 4,000 stocks on Monday. Monday was the 5th day of the current QQQQ down-trend. The QQQQ reflects the Nasdaq 100 index, which excludes financial stocks — the primary gainers on Monday.
GMI: 0; GMI-R: 0; GMI performance since April
The GMI and GMI-R remain at zero.
There were 12 new highs and 328 new lows in my universe of 4,000 stocks on Friday. This number compares with 988 new lows on July 15. So this decline is not nearly as severe as last July's, thus far. Friday was the fourth day of the current new QQQQ short term down-trend. Note that the Worden T2108 indicator is now at 42%, in neutral territory far above the extreme lows (below 20%) reached at prior market bottoms.
I have written before that the GMI indicators have helped me to be out of the market or to be mainly in cash during all significant market declines.
This chart shows how the GMI has tracked the QQQQ since April 17. It shows only changes in the GMI. Note that during rises in the QQQQ, the GMI is usually at 4 or above. When the GMI is below 3, I tend to get defensive. Note that the GMI held at zero through most of July. It then rose with the August rally and then fell quickly to 3, to 1 and now, to zero. This ability of the GMI to track the ups and downs of the QQQQ was also evident in prior time periods. While not perfect, I rely on the GMI to guide me when to enter and exit growth stocks, as reflected in the QQQQ (Nasdaq 100 index) ETF. Meanwhile, during the past 2 years, 5 consecutive daily declines in the QQQQ is extremely rare and we should expect a bounce on Monday.