The GMI and GMI-R remain at zero. Friday was the 9th day of the QQQQ down-trend. There were 28 new highs and 164 new lows in my universe of 4,000 stocks on Friday. If the FED lowers rates on Tuesday we could have a massive rally. I would be very cautious with any short positions.
GMI: 0; GMI-R: 0; 8th day of QQQQ down-trend; stocks at new highs
No change in the GMI and GMI-R. Note that there were 20 new highs and 452 new lows in my universe of 4,000 stocks on Thursday. This was the highest number of new lows since July 15, when there were 988. The Worden T2108 indicator is now at 37%.
Whenever the market is weak I keep an eye out for stocks hitting new 52 week highs. I especially like stocks near their all-time high. These may be the next leaders when the market recovers. Stocks I am watching (some of which I own) include DXPE, CRMT, SXE, HGR, FSYS, HWK, VAR, STE. All of these companies have great earnings and technicals. Sometimes I cannot resist nibbling at promising stocks even in a declining market, but I always use a close stop. Cutting losses quickly is the trader's secret weapon–the first loss is often the smallest loss. If a stock fails to behave as I have predicted, I get out of my position. Do not tolerate a misbehaving stock! With the small commissions available these days, I can always afford to buy it back if the stock behaves well again. Some of my best gains have come from buying back stocks that I have been scared out of. As long as I am trading in a tax deferred account, I do not have to worry about the wash sales tax rules. Nevertheless, I remain over 90% in cash during market down-trends—like this.
GMI: 0; GMI-R: 0; 7th day of QQQQ down-trend; comfortably in cash and short
No change from Tuesday; the GMI and GMI-R remain at zero. There were 26 new highs and 310 new lows in my universe of 4,000 stocks on Tuesday. The Worden T2108 indicator is at 40%, far from bottom territory. This is a great time to be short or in cash. Don't let the pundits scare you into the market. There is plenty of time to jump on board once a bottom is in. The key is to wait for the turn rather than to try to anticipate one. A real up-trend last weeks, months and sometimes, years. The up-trend in the QQQQ that began in July, 2006 lasted until November, 2007. One could have entered that market 3 months after the bottom and still have caught the bulk of that rise. There is plenty of time to get back in after a real turn.