The market up-trend is in place and I am almost 100% invested on the long side in my trading IRA. I am also largely invested in mutual funds in my university pension. This is the time to ride the train and not to fight it. No one knows when the up-trend will end. The idea is to ride it and have sufficient stop losses in place to exit if the trend should convincingly reverse. The GMI is at 5 of 6, having been at 6 at Thursday’s close. There were less than 100 new highs (74) in my universe of 4,000 stocks on Friday, bringing it down to 5. I suspect we will be back to 6 this week. Meanwhile, 84% of the Nasdaq 100 stocks had their MACD close above its signal line, a nice show of strength. The Worden T2108 Indicator is at 88%, near the top of the range it typically reaches. But it can stay above 80% for months.
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GMI hits 6 for first time since June, 2008!
All six of the short and long term GMI indicators are positive for the first time since June 5, 2008, before the big market decline began. The more sensitive GMI-R is now 10 out of 10. I am therefore getting fully invested in my IRA and university pension accounts. Of course, the market could turn down, but I believe that I am am going long with the odds in my favor. If the up-trend continues I will highlight individual stocks. There were 124 stocks in my universe of 4,000 at 52 week highs on Thursday.
Up-trend is here; 50% invested; some rocket stocks
To be successful in the market, I have to block out all other opinions and look at what the market is telling me. The market successfully tested support last week and the 30 week averages for the SPY, QQQQ and DIA are turning up. This is a classic Weinstein Stage 2 pattern. I get out of the market when the 30 week averages turn down and back in when they turn up. I know this seems simplistic and naive, BUT IT WORKS!! It keeps me on the right side of the market’s primary trend. And 70-80% of stocks follow the general market’s trend–end of story. The GMI is in an up-trend mode, going between 4 and 5.