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GMI: +2; Retracement; Some strong stocks

@ 12:01 am

The GMI declined to +2 on Tuesday.  This is because there were just fewer than 100 new highs (97) and there were not enough (just 16) successful 10 day new highs–stocks that hit a 52 week high 10 days ago and closed higher on Tuesday than they did 10 days earlier. 42% of the Nasdaq 100 stocks advanced on Tuesday, compared with 34% of the S&P 500 stocks and 50% of the Dow 30 stocks. This retracement was to be expected, given the preponderance of gainers on Monday.  Gmi1025_1 The GMI reflects strength in the QQQQ, which is in the second day of its new up-trend (U-2).  The percentage of stocks in my universe of 4,000 that closed above their 10 week averages declined two, but the percentage in a short term up-trend increased by four.  The percentage of stocks that have doubled in the past year and are above their 30 day averages declined two percentage points.  About an equal percentage of stocks (12%/13%) are within 5% of their yearly high or yearly low.

I remain cautiously bullish as long as the QQQQ remains above its 30 day average.  There are plenty of interesting stocks flexing their muscles.  Check out:  NTRI, IRIS, KNDL, TIE, ADSK, NDAQ, AAPL, VIVO.  These are not recommendations, only a starting point for research and study.

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

GMI: +4; Market turning–into equities

@ 12:01 am

I suggested yesterday that the market seemed like it could reverse in this sea of gloom.  The QQQQ did break above its 30 day average on Monday and closed there.  Gmi1024 Moreover, 61% of the stocks that hit a new high 10 days ago closed higher on Monday than they did 10 days earlier.  While this was far from the 100 successful 10 day new highs I would like to see for this index to count as positive, it would be impossible for this indicator to turn positive for some time if I required 100 succcessful 10 day new highs.  This is because, before Monday,  there has not been a day with 100 new highs since October 4.  There were 112 new yearly highs in my universe of 4,000 stocks, and 48 new lows.  This was the first day since October 4, that there have been more new highs than new lows.  86% of the Nasdaq 100 stocks rose, along with 91% of the S&P 500 stocks and 93% of the Dow 30 stocks.  These are the strongest readings since September 6.  34% of the stocks in my universe closed above their 10 week averages, and 61% of the Nasdaq 100 stocks closed above their 30 day averages.  64% of the stocks that have doubled in the past year closed above their 30 day averages.  And there are now more stocks within 5% of their 52 week high (14%) than their 52 week low (11%).  In short, this market has strengthened considerably and I am moving from cash into equities.  Monday was the first day in the new QQQQ up-trend (U-1).

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

GMI: +1; Stronger QQQQ–weak Dow, Too much gloom

@ 11:28 pm

The GMI is still at +1.  Gmi1021_2  But there were some signs of strength last week.  On Friday, 68% (19/28) of the stocks that hit a new high 10 days ago closed higher than they closed 10 days earlier.  Still, this represented only 19 successful 10 day highs.  There were 60 new highs on Friday and 96 new lows.  More than one half (51%) of the 183 stocks that doubled in the past year closed above their 30 day averages, indicating support for the strongest stocks.  And 42% of the Nasdaq 100 stocks closed above their 30 day averages, up from 21% on October 12.  9% of the stocks in my universe of 4,000 stocks are now within 5% of their yearly highs.

The greater strength in the Nasdaq 100 stocks is also apparent in this week’s WPM.  Wpm1021 The QQQQ (the Nasdaq 100 ETF) is the only index of 5 that is still above its 30 week average.  Moreover, 42% of its components stocks are above their 30 day averages, and 47% are above their 30 week averages.  The QQQQ stocks are therefore showing both short and longer term support.  In contrast, the Dow stocks are the weakest group and may lag the market in the next rally. Don’t judge the market by the Dow 30’s action.

Last week, Mark Hulbert published an article stating that the investment newsletter writers’ sentiment is extremely bearish.  In the past, such readings were found at market bottoms.   There are just too many bears for comfort, and we are entering the end of year period when the market tends to rally.  In the past, when I became so frustrated with losses that I abandoned the market (like the present), the market often turned.  Thus, in spite of the GMI ‘s being stuck at +1, I am looking to buy promising Nasdaq type stocks, especially if the QQQQ reclaims its 30 day average tomorrow.  Among the stocks that my scan for strong stocks came up with are:  PSYS, WCC, SMTS, KNDL, NDAQ, URBN and VIVO.

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