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GMI: 5?; 100% cash

@ 12:01 am

The GMI is 5 with a "?"  The GMI-S rose to 44, with improvement in the QQQQ short term indicators. It is too early to tell if the Daily QQQQ Index has turned positive. Gmi0104_1 The short term QQQQ trend is just too difficult to decipher.  There were only 126 new 52 week highs in my universe of 4,000 stocks. However, 80% of the Nasdaq 100 stocks rose, but only 48-50% of the S&P 500 and Dow 30 stocks.  Clearly this was a schizoid market.  Only 56% of the IBD 100 stock list from 12/18 advanced.  So the gain on Thursday was mainly in the large tech stocks in the Nasdaq 100 index.  The leaders, RIMM, GOOG and AAPL all looked good, for a change.  With the market trend so murky, I sold my QID with a loss and went to 100% cash.  This is not the time for me to make large bets on the QQQQ trend.

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GMI: 5; Nasdaq 100 index weak

@ 12:01 am

The GMI remains at 5.  54-60% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes advanced on Wednesday.  Gmi0103_1 There were 33 new 52 week lows in my universe of 4,000 stocks, the largest number since November 2.  Wednesday was the 8th day in the current QQQQ down-trend.  Given the rapid retreat from Wednesday’s highs, do we need more evidence that this market is topping?  The leaders, AAPL, RIMM and GOOG continue to weaken. I am slowly accumulating QID as the QQQQ down-trend continues.

See my disclaimers at the bottom of my prior post.

GMI: 5; GMI-S: 31; The Dow’s dirty little secret;

@ 12:01 am

We  keep hearing about how the Dow is at an all-time high.  I looked at the price range of the 30 Dow stocks since the bubble top in 2000.  Was I surprised to find that only 10 of the 30 stocks (33%) surpassed their 1999/2000 top in 2006:  CAT, XOM, BA, AXP, JNJ, MO, C, UTX, MMM and PG.  The fact that the Dow 30 average reached an all time high in 2006 is meaningless when 20 of the 30 stocks never got above their 1999/2000 bubble peaks!  It all boils down to media hype to get unsuspecting investors to enter this record high market …

Meanwhile the GMI closed on Friday at 5 but the GMI-S fell 19, to 31. Gmi1229_1 With the media talking about another great year, it is interesting that my short term indicators for the Nasdaq 100 stocks and the S&P 600 Small Cap stocks are all negative.  Only 18% of the Nasdaq 100 and S&P 500 stocks rose on Friday, along with 23% of the Dow 30 stocks.  Just 33% of the Nasdaq 100 stocks have closed above their 30 day averages.  Only 18% of the IBD 100 list from 12/18 advanced and only 29% closed higher than they did on 12/18.  Friday was the 7th day in the current QQQQ down-trend.

So, rather than try to predict the market, we need to look at what the market is doing now.  The Nasdaq 100 stocks clearly are in a short term down-trend.  The past leaders, RIMM, AAPL and GOOG, all look tired, and it has been several weeks since they hit new highs. Since the QQQQ hit a new high on 11/24, it has fallen 3.34% and 63% of the Nasdaq 100 stocks have declined.  In fact, only 26% of the Nasdaq 100 stocks are up 1% or more since 11/24.  With odds like these, I am mainly in cash and ready to accumulate more QID if the QQQQ continues to weaken.

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