Friday was the 27th day of the current QQQQ short term up-trend. There were 10 new highs and 6 new lows in my universe of 4.000 stocks on Friday. Three of the ten new highs were on the IBD100 lists from today’s edition: STAR, HANS and JJNF. Since the first day of the QQQQ uptrend (by my definition) on 3/18, the QQQQ has climbed 13%, the Ultra long QQQQ ETF by 28%, and the SPY by 8%. During this same period, 84% of the stocks in the Nasdaq 100 Index (measured by the ETF, QQQQ) have advanced, with one third advancing 20% or more. The key to successful trading on the long side is to have the relevant index in an up-trend.
General Market Index (GMI) table
Buying Rocket Stocks; My market indicators are very strong.
I just completed the best 2 week period in a year. I own a lot of the stocks listed to the right, which are having terrific runs. The GMI registered 5 for the first time since August, 2008, before the start of the major market decline. My Successful 10 day New High Index turned positive. There were finally enough stocks that hit a new high 10 days ago that have closed higher than they did 10 days ago.
Stocks on the 52 week new high lists that are also at or near all time highs is where I find potential rockets. Nicolas Darvas made a fortune trading such stocks. IBD100 stocks near all time highs include: GMCR, NFLX, MNRO, QSII, VLGEA, AZO, SNDA, NTES, ALGT. TNDM. TSYS, HGG and ORLY are also very strong, but are not yet on my IBD100 lists.
While most of the world looks for bargain stocks at new lows, I seek rockets heading to the moon. The greatest winning stocks are those heading up to ever higher levels. Think of how many times that YHOO or CSCO or MSFT hit all time new highs as they multiplied their prices many times during their great bull runs. If you want to hop a rocket to the moon, it better be pointing up and gaining altitude.
Dow “bottom rally” puny thus far!; IBD100 and other growth stocks at new highs; I’m bullish for now
A lot of stocks are beginning to look good. However, there were only 6 new highs and 8 new lows in my universe of 4,000 stocks on Friday. Two of the 6 new highs are stocks on the IBD100 list, CPSI and TNDM. TNDM is at an all-time high and both of these stocks came public within the past 8 years, a prime criterion of past winning stocks, according to IBD founder William O’Neil. I scanned my universe and found 105 stocks that are within 10% of their 52 week highs and that have promising technicals. Among these stocks that are on my IBD100 lists from the past year and that also have last quarterly earnings up 50% or more are: AIPC, GMCR, ALGT, QSII, SXL, JJSF, NFLX and PNRA. I own some of these stocks…
The GMI remains at 4 and the GMI-R is at 7. The IBD Mutual Fund Index is above its 50 day average, indicating to me that growth mutual funds are starting to make money. When these fund managers can make money buying growth stocks, so can I. The Worden T 2108 is now at 84%, heading towards overbought territory, but not a concern to me, given that the market is snapping back from very over-sold readings. Both the QQQQ and SPY have closed above their 10 week averages for several weeks, a key sign of technical strength. While still in longer term down-trends, when these ETF’s are above their 10 week averages, I have usually been able to make money buying stocks.