Wishing Wealth Blog

I was prevented from completing my blog post this weekend because we lost power during the storm Sunday afternoon.   I still lack power, and will do a full post when it returns and I can get on my home computer.

The only indicator still negative is the QQQQ Weekly Indicator, which means the longer term trend remains flat or down.   We are close to a turn, however, and then the GMI would equal 6.   There were 178 new 52 week highs on Friday in my universe of 4,000 stocks.   I will look for buys among these stocks which held up during the recent market turbulence.

One negative, with the T2108 at 78%, it is getting near the level where markets have topped. I always wade into the market slowly when I think the market trend is turning.

The indexes are very close to breaking above their key longer term moving averages.   There were 134 new 52 week highs and only 17 new lows in my universe of 4,000 stocks on Thursday.   The Worden T2108 Indicator is now at 70%, almost in overbought territory.   The GMI is at 4. The IBD Mutual Fund Index is now above its 50 day average, which is still declining. The key is not to jump the gun but to wait for a definite signal of a longer term up-trend.   The GMMA daily chart of the QQQQ (click on chart to enlarge) shows that the short term averages (black) are climbing up through the longer term averages (red)–but they are not there yet!

The GMI declined to 2 (of 6) and the GMI-R to 4 (of 10).   We are at a point in time when the daily moving averages are flat and the major indexes whipsaw us as they close above and below the averages.       I am concerned when the leaders like AAPL, GOOG and NFLX are weak and unable to reach new highs. The leaders of the prior bull move often weaken and decline before the rest of the market. On the other hand, the Investors Intelligence polls show about as many newsletters are bearish as bullish, a rare occurrence and a contrary, bullish sign.

It is much easier to be in the market when there is a clear general market trend.   This is a good time to be on the sidelines safely in cash.