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This has been a great market to watch from the sidelines.  The indexes are jumping above and below their key moving averages, signifying the lack of a consistent trend.  The GMI remains at +1 with only the Weekly QQQQ Index positive.  Very few (71) stocks hit new highs on Friday and there were only 15 successful 10 day new highs.  Nevertheless, there was some improvement in the markets.  The percentage of stocks in my  universe of 4,000 that closed above their 10 week averages climbed 3, to 29%.  And 52% of the stocks that have doubled in the past year closed above their 30 day averages.  Almost as many stocks are within 5% of their yearly highs as their lows (11% vs. 14%).  Friday was the second day in the QQQQ decline (D-2).

The WPM showed some strengthening last week.  The largest improvement occurred in the Dow 30 stocks.  It is the only index closing above its 30 day average, as did 67% of its component stocks.  The components of the other 4 indexes showed large increases in the percentage of stocks closing above their 30 day averages.  The QQQQ, MDY and IJR all closed above their 30 week averages, indicating some longer term strength.  Almost one half of the stocks in all five indexes closed above their 30 week averages.

The bottom line is that there are some signs of general strengthening, but most indexes’ short term trends are still down.  If the SPY and QQQQ can regain their 30 day indexes, I may be tempted to go long again.

Please send me your feedback at: silentknight@wishingwealthblog.com.

The QQQQ could not hold its 30 day average and the markets are back in a decline.  The GMI fell to +1, with only 46 new highs and few successful 10 day new highs, Thursday. Only 7% of the Nasdaq 100 stocks, 14% of the S&P 500 and 17% of the Dow 30 stocks advanced on Thursday.  This was the weakest showing since October 5, when the QQQQ began a decline and the GMI registered 1.  The percentage of stocks closing above their 10 week averages fell 7, to 26%.  Only 43% (-17) of this year’s doublers now remain above their 30 day averages.  There were 46 new highs and 199 new lows in my universe of 4,000 stocks. Twice as many stocks are now within 5% of their yearly lows than highs (18% vs. 8%). Thursday was the first day in a new QQQQ decline (D-1).  The next big test is whether the QQQQ can hold the bottom of the last decline, around 37.33.  These are the markets that try traders’ souls.  The key is to conserve capital until the market develops a solid trend to trade.

Please send me your feedback at: silentknight@wishingwealthblog.com.

The GMI rose to +3 on Wednesday because there were 101 new highs in my universe of 4,000 stocks.   There were also 100 new lows, demonstrating how ambivalent this market is.  32% of the Nasdaq 100 stocks, 35% of the S&P 500 stocks and 47% of the Dow 30 stocks advanced Wednesday.  21% of stocks are now in a short term up-trend, up from 8% on October 18.  One third of stocks are now above their 10 week averages, up from 21% on October 13.  Nine of the 14 stocks that hit a new high 10 days ago closed higher than they closed 10 days earlier.  While this represents 64% successful 10 day new highs, the numbers are so small that I kept this indicator negative.  Nevertheless, it suggests that buying new highs ten days ago had a better than even chance of proving profitable. Wednesday was the third day (U-3) in the QQQQ up-trend.

Please send me your feedback at: silentknight@wishingwealthblog.com.