The up-trend continues but the T2108 is at 85%, about as high as it gets. That does not mean we will get a decline, for it can stay above 80% for weeks. I went to an investor’s group meeting this weekend and was amazed to find that many sophisticated investors are resisting this rally. About two thirds expected an imminent market decline. I am incredulous that people would rather fight a trend than ride it. If one puts in stop losses to control risk, why not ride the market until it falters. No one can consistently know when a trend will end. Stop guessing! Meanwhile, the GMI
Up-trend is here; 50% invested; some rocket stocks
To be successful in the market, I have to block out all other opinions and look at what the market is telling me. The market successfully tested support last week and the 30 week averages for the SPY, QQQQ and DIA are turning up. This is a classic Weinstein Stage 2 pattern. I get out of the market when the 30 week averages turn down and back in when they turn up. I know this seems simplistic and naive, BUT IT WORKS!! It keeps me on the right side of the market’s primary trend. And 70-80% of stocks follow the general market’s trend–end of story. The GMI is in an up-trend mode, going between 4 and 5.
Longer term averages survive retest; Going long
The major indexes all held at their 30 week averages and the QQQQ is in a strong Stage 2 advance. There were 43 new highs in my universe of 4,000 stocks on Wednesday, the most since September 19th. There were only 6 new lows. The GMI is at 5 for the first time since April 24, and the T2108 indicator rebounded to 65%. I wrote earlier this week that the market was in a short term down-trend within a longer term up-trend. Well, it looks like the indexes found support at their 30 week averages and the short term down-trend has ended. The QQQQ is back above its key 10 week average. I am going long in my trading account and transferring more funds from money market to growth mutual funds in my university pension. It looks to me like we are at the beginning of a Stage 2 advance with the 30 week averages having successfully turned up. See Weinstein’s book, to the lower right, for an explanation of stage analysis, my primary method for determining the market’s major longer term trend. Among the stocks at new 52 week highs on Wednesday that are close to their all-time highs are: LL, AIXG, MVL, ORLY, ROST. Any stock that can come through the past year’s market decline and be trading near its all-time high is a potential market leader that should be watched. I own ROST.