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While the GMI remains at +6, a lot of my internal market indicators are weakening.  There were only 114 new highs in my universe of 4,000 stocks and the percentage of Nasdaq 100 stocks closing above their 30 day averages fell from 62% to 46%.  A close below the 30 day average is frequently a sign of impending weakness for momentum stocks. Only 15% of Nasdaq 100 stocks advanced on Wednesday, along with 30-31% of the stocks in the S&P 500 and Dow 30 indexes. The percentage of stocks closing above their 10 week average has declined from 64% on Monday to 53% on Wednesday.  The DIA has closed just below its 30 day average and the SPY and QQQQ are very close to their 30 day averages.  Sustained closes of these indexes below their 30 days will trigger reductions in the GMI very soon.  Bottom line–I am becoming more defensive and will go short or in cash if the indexes do not bounce soon.

The best news I have to offer is that the short term interest rate indicator is showing unusual weakness–suggesting that traders think the Fed may have some good news next week.

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

Even though the markets declined Tuesday, I find no change in trend.  Only 32% of the Nasdaq 100 stocks rose, compared to 21% of the S&P 500 stocks and 17% of the Dow 30 stocks.  There were 155 new yearly highs and and only 34 new lows.   78% of the stocks that hit new highs 10 days ago closed higher Tuesday than 10 days earlier.  And stocks in a short term up-trend rose to 56%.  Tuesday was day 6 (U-6) in the QQQQ up-trend…….

Even on this weak day, GOOG managed to rise and came close to its all-time high.  XWG and GLW and SWN also rose.  XWG is showing some high volume up days–worth watching, especially if it breaks 14.75. (I own GOOG, GLW and XWG.)

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

GMI stays at +6.  58% of the Nasdaq 100 stocks rose Monday, compared with 50% of S&P 500 stocks and 47% of Dow 30 stocks.  There were 306 new yearly highs in my universe of 4,000 stocks.  84% of the 70 stocks that hit a yearly high 10 days ago closed higher on Monday than 10 days earlier.  Buying stocks at new highs has therefore likely to have been profitable the past 2 weeks.  More than one half of stocks (53%) are now in a short term up-trend and 78% of stocks that doubled in the past year closed above their 30 day averages.  64% of all stocks closed above their 10 week averages.  One third of all stocks closed within 5% of their 52 week highs.  This is day 5 (U-5) of the up-trend in the QQQQ.  To sum it all up, the market remains strong and buying strong stocks near new highs appears to be a winning strategy…………….

I have been writing about the strength in GOOG during the past few weeks.  Monday, the stock broke above $300 again.   Now that the hype about GOOG has died down, the stock is showing signs of new strength.  Its 10 day average (dotted line) has now crossed above its 30 day average (red line).  Can $400 per share be far away?

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