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A surprising show of strength; GMI: +3; Sectors with many new highs

@ 11:58 pm

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

Who would ever have believed that a market in a confirmed down trend could withstand a terrorist attack and actually hold its own?  Today, 50-56% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes actually advanced, far above yesterday’s performance.  In fact, only 7% of Dow 30 stocks rose on Wednesday, compared to 50% on Thursday.  Gmi707_1 There were 173 new yearly highs in my universe of 4,000 stocks and only 28 new lows.  Yes, we are in day 9 (D-9)  of the QQQQ decline, but 55% of its stocks advanced today.  And 109 of the 186 stocks that hit a new high 10 days ago closed higher today than they closed 10 days ago.  So there is a lot of strength under the surface………………………………

So where was the strength today?  I looked at the industries represented among the 173 stocks that hit a new high today.   I found that 7 stocks in the apparel industry hit new highs:  ANF,DBRN,SCVL,STGS,CHS,MW,CHRS.  There were 13 stocks in the independent oil and gas sector:  ECA,NXY,UPL,SFY,TLM,PTF,CNQ,SWN, SM,APC,XTXI,DVN,PVX.  Oil and gas equipment services had 11: BHI,NGS,SOSA,PAA,PPX,WMB,TMG,KMP,HOC,TNT,PCZ.  While not as many, the investment brokerage stocks were also strong:  TRAD,SCH,ET,LM,AGE.  It would seem to me that  the sectors that have a lot of new highs on a day like this are sending signals of future strength.  As for me, I added to some of my positions that rose today.  While the markets are in a down trend, it appears that the stocks that will report good earnings will buck the trend, at least until their earnings come out.  If stocks were going to decline more near term, I think the market had the perfect excuse to do so today–and it did not.

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

The decline continues; GMI: +3; No new purchases

@ 10:44 pm

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

The down trend in the SPY reasserted itself today and we are in the 8th day of decline (D-8) in the QQQQ. Gmi706  I might add that the Dow 30, as measured by the DIA, also remains in a consistent decline.  The Nasdaq 100 fared better today than the other indexes, with 36% of its stocks advancing.  This compares with 23% of the S&P 500 stocks and only 7% (2) of the Dow 30 stocks.  There were 360 new 52 week highs in my universe of 4,000 stocks and only 13 new lows.  Still, we had 109/170 stocks that hit a new high 10 days ago and closed higher today than they did 10 days ago.  Buying new highs has continued to pay off…………………………………………

I think this remains a good time to be short or in cash.  The stocks on which I own put options  (KRI and LXK)  fell today, giving me a profit.  Some of the stocks I still own (BBY, MW, WFMI) held their own today.  Still, the odds  now favor a decline and I will not make any new stock purchases until the GMI strengthens.

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

SPY reversing? GMI: +3; Buying some stocks and keeping puts

@ 10:26 pm

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

The market is now very divided.  My QQQQ daily and weekly indicators are still Gmi705 negative and in declines.  The daily SPY index, however, is close to turning positive. Over 400 stocks in my universe of 4,000 stocks hit new highs today, the most since I began this blog.  Between 74%-77% of the stocks in the Nasdaq 100, S&P 500 and Dow 30 indexes rose today.  The GMI remains at +3 and the QQQQ is in its 7th day of the decline (D-7).  Tomorrow is a critical day.  We will learn whether the SPY turns positive and whether the QQQQ will follow its lead. I suspect this is the typical earnings release rally……………………………………….

I sold out  my puts on the SPY at a loss, and then I immediately went long stocks.  (I told you yesterday that if I find myself on the wrong side of the trend I have no problem turning on a dime.  It is suicide to marry a scenario that is at odds with the market’s action.) I found so many rockets rising that I could not resist nibbling at such powerful stocks as FTO, BBY, HITK, LCAV, WFMI, HANS and MW.  Of course, I put stops in on all of them in case this rally fades.  I would still be much more confident if the QQQQ and SPY were in synch, but sometimes different market sectors behave in an uncorrelated fashion. Just in case, I have kept my put options on some of the weakest stocks.

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.