Dr. Wish

GMI: 1; Don’t fight the market down-trend

@ 11:54 pm

The GMI fell to 1 on Wednesday.  Gmi0809 49% of the Nasdaq 100 stocks advanced, as did 30% of the S&P 500 and 23% of the Dow 30 stocks.  There were 88 new highs and 130 new lows in my universe of 4,000 stocks.  Only 36% of the Nasdaq 100 stocks closed above their 30 day averages and only 17% are in a bullish stage 2 up trend.  34% of my stock universe advanced as did 33% of the IBD 100 stocks from 5/15.  Only 30% of the IBD 100 from 5/15 are above their 10 day averages and only 35% are above their 30 day averages.  Only 20% of the IBD 100 stocks from 5/15 closed higher on Wednesday than they did on 5/15.  With 80% of IBD 100 stocks down or unchanged since 5/15 along with 64% of my universe of 4,000 stocks, how much more evidence do we need that this is a time to be in cash or short!  Wednesday was the 25th day of the current QQQQ short term down trend.  My scan of the market found just 7 rockets and 329 submarines.  We fight the down-trend at our peril.

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: 2; Most stocks weakening; NDAQ, NTRI, GOOG too?

@ 10:30 pm

The market continued to weaken on Tuesday.  Gmi0808_2 The large caps were stronger than the techs, but not by much.  27% of the Nasdaq 100 stocks rose, along with 31% of the S&P 500 and 43% of the Dow 30 stocks. While 29% of my universe of 4,000 stocks rose, only 23% of the IBD 100 list from 5/15 rose.  Thus, even the growth stocks declined on Tuesday.  Tuesday was the 24th day in the current QQQQ decline. There were only 76 new highs and 98 new lows in my stock universe.  Only 16% of stocks remain within 5% of a new high, while 11% are within 5% of a new low. Only 37% of my universe of stocks closed higher on Tuesday than they did on 5/15.  With such odds, one should be short or in cash. 

My market indicators have weakened, although the large cap stocks (DIA, SPY) remain in an up-trend.  The GMI-S is now 50. I am content to remain mostly on the side lines, although on Tuesday I did buy put options on a former high flyer that appears to be topping. When you look at SBUX and HANS and WFMI, you can see how the market has turned against the bull market winners.  Even NTRI and NDAQ, and do I dare say, GOOG, are beginning to look sick.  This is not the time to hang onto stocks with big gains that are starting to look tired…….

Please send your comments to:  silentknight@wishingwealthblog.com.

GMI: +2; IBD 100 stronger

@ 9:47 pm

The GMI fell back to +2; there were only 53 new highs (82 lows) in my universe of 4,000 stocks.  On Monday, 24% of the Nasdaq 100 stocks advanced, along with 33% of the S&P 500 and Dow 30 stocks.  The GMI-S fell to 69, with more weakness in the short term indicators for the QQQQ and IJR ETF’s.  Gmi0807 In contrast, the SPY and DIA indicators remain strong.  Monday was the 23rd day in the current short term decline in the QQQQ.  However, the IBD 100 stocks of 5/15 outperformed the general market on Monday.  54% of the IBD 100 stocks from 5/15 advanced while only 32% of the 4,000 stocks in my universe advanced.  I do not yet know if the IBD Mutual Fund Index has turned positive.  My TC2005 scan of the market yielded 282 submarines and nine rockets.  With the GMI at +2, it is a good time to sit back in cash. The growing strength in the IBD 100 growth stocks suggests that there is interest in acquiring stocks with good fundamentals.

Please send your comments to:  silentknight@wishingwealthblog.com.