All of my indicators have turned negative again and I am back to cash. I have considered buying some QID, but with my short term moving averages being flat, I will probably get repeatedly whipsawed as the indexes move above and below their averages. However, at some point a real tradable trend will develop. There were 3 new highs and 138 new lows in my universe of 4,000 stocks on Friday. Only 30% of the Nasdaq 100 stocks closed above their 30 day averages and the QQQQ just completed the 12th day of its short term down-trend.
One of the GMI’s components tracks the percentage of “successful” stocks that hit a new high 10 days ago that closed higher today than they closed 10 days ago. It is a useful indicator to see if break-out stocks are continuing to advance. This indicator has been negative since late October, largely because we rarely saw the required 20 new highs in a day. You can see this indicator is still negative in the GMI table below….