GMI at 5! Dividend stocks dominate the new high list…

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For the first time since December 29, I recorded over 100 new 52 week highs in one day out of about 5100 U.S. stocks. The only GMI component that is still not positive is the most important. The QQQ is still below its 30 week average. On the other hand, the other indexes are strengthening. The SPY, NYSE, DOW 30 Industrial and the DOW 20 Transportation indexes have all reclaimed their 30 week averages. These indexes were the first to weaken and are now the first to strengthen. Remember that the T2108 also reached levels in January only seen at major market bottoms. Here is the weekly chart of the SPY. While it has retaken its 30 week average (red line), I will not be very bullish until that average turns up again.

Screen Shot 2016-03-13 at 8.46.39 PM

 

The psychology of the market has changed. People can only stay scared for a limited amount of time. I believe we have worn out the fear surrounding oil and China. It will take something new to really scare investors again. Perhaps if the FED starts to raise interest rates again that will precipitate a major decline. Unless these indexes close back below their 30 week averages, I will continue to slowly reinvest in stocks.

The composition of stocks hitting new highs last week is amazing. Of the 152 stocks over $15 that hit a new high last week, 53% had dividend yields of 2% or more and 26% paid 3% or more. The most frequent  industries in this new high list were utilities, 24% followed by REITs, 7%. In other words 31% of the stocks that hit new highs last week were utilities and REITs. This is not a growth stock market. The winners of the bull market, especially biotechs,  have been decimated. The boomers, smarting from their losses and earning nothing in their savings accounts are piling into safe dividend paying stocks and ETFs. Perhaps in a few months after people become more confident of a market bottom, people will take chances with the more speculative stocks. For now, it looks like the solid dividend paying companies are where the new highs will be seen. Of course, if we get to the “Sell in May” season and the FED starts to raise, there may be no place to hide from a reinvigorated bear…..

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13 recent GLB stocks to monitor: $ALGN, $BMS, $CINF, $CNSL, $CPRT, $ELLI, $MO, $NLSN, $PNRA, $SWHC, $SYY, $TFX, $TXRH, $VSTO

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With the GMI on a buy, IBD on a confirmed up-trend and my QQQ short term up-trend in its 10th day, I have been tip-toeing back into this market in my trading IRA. However, the longer term trend is not up,  so I am not ready to reinvest my university pension funds. I do think it is okay to talk about some stocks that appear to be showing technical strength. The stocks below all had a recent  green line break-out (GLB). This means they have formed a 3 month or longer top at an all-time high and have just broken through that top to a new all-time high. Such strength can sometimes signify the start of a large multi-month move. I am showing these GLB stocks as a way of explaining how I find promising stocks. When I do buy a GLB, I always exit if the stock comes back below the green line. This is a sign of a false break-out and technical weakness. When a stock breaks through its all-time top, I want to see an increase in volume as others rush in to buy. I often buy a stock back if it then closes back above the green line. Here are some weekly charts of stocks that hit a new yearly high on Friday and that have had a recent GLB. I have not researched them for a possible buy. Some of them had unusually large trading volume last week and there may have been an important announcement that would need to be reviewed and weighed before purchase. Before buying, I  always review the fundamentals of the company, its next earnings date, and other technical indicators. I am putting these GLB stocks in a watch list to monitor over the coming days. Let me know if you find such posts useful. These are weekly charts.

ELLI

Screen Shot 2016-03-05 at 5.22.17 PMNLSN:

Screen Shot 2016-03-05 at 5.23.37 PMVSTO:

Screen Shot 2016-03-05 at 5.24.36 PMCINF:

Screen Shot 2016-03-05 at 5.25.24 PMSWHC:

Screen Shot 2016-03-05 at 5.26.18 PMCPRT:

Screen Shot 2016-03-05 at 5.27.00 PMBMS:

Screen Shot 2016-03-05 at 5.28.19 PMPNRA:

Screen Shot 2016-03-05 at 5.29.13 PMTXRH:

Screen Shot 2016-03-05 at 5.29.57 PM

ALGN:

Screen Shot 2016-03-05 at 5.31.40 PMMO:

Screen Shot 2016-03-05 at 5.32.26 PM

SYY:

Screen Shot 2016-03-05 at 5.33.15 PMTFX:

Screen Shot 2016-03-05 at 5.33.59 PMHere is the GMI table. GMI03042016