The GMI and GMI-R are back to zero, their minimum values. While the indexes looked weak on Wednesday, the market was not really as weak as it has been. There were 16 new highs and only 191 new lows in my universe of 4,000 stocks on Wednesday. Wednesday’s number of new lows was less than one half of the number of new lows on Tuesday (409); on Monday there were over 700 new lows. Furthermore, the Worden T2108 indicator is at 10%, above the extreme low level of 8% reached on Monday. Wednesday was the 20th day of the current QQQQ down-trend. It remains to be seen whether Thursday’s levels of these technical indicators will break below those reached on Monday. If not, this bounce may persist for a while longer.
GMI: 0; GMI-R: 1; T2108: 11%; 19th day of QQQQ down-trend; IBD New America stocks
There were 14 new highs and 409 new lows in my universe of 4,000 stocks on Tuesday. The T2108 indicator bounced back to 11%. Time will tell whether this bounce will lead to a real turn. I sold out my QID and began to make pilot buys in some of the IBD New America stocks. Each day the IBD New America section presents a company that they think represents a promising visionary business. I have created a watchlist of all New America stocks the past few months that I will monitor for break-outs. The following nine New America stocks closed Tuesday within 5% of their 52 week high and may be worth watching: NUVA,BABY,ACL,BMI,GHM,FLIR,TRLG,CELG,FCN. I own some of these.
Barron’s cover has bear on it—tremendous contrary signal of bottom
I just saw their latest issue with a bear on it. Over the years, when major magazines publish a bull or bear on the cover it usually is a sign that the market is going to go in the opposite direction. When Barron’s editors are so sure of the market that they place a bear on the cover, I think it is time to look for a bottom.