The GMI and GMI-R are now zero. While the last two times these two indexes were zero the market bounced, I am concerned that the number of new 52 week lows (783) in my universe of 4,000 stocks on Friday was the highest, by far, that it has been since I began posting over two years ago. And the Worden T2108 indicator is at 31%, still well above the low levels at which bottoms have occurred. With all indexes I follow now below their 30 week averages, I think this may be the beginning of a severe market down-trend. Friday was the second day of the new short term down-trend in the QQQQ. I was stopped out of most of my very small positions on Friday and remain mainly in cash. I am not looking for bargains. This is the time for me to relax on the sidelines.
GMI:2; GMI-R:2; First day of new QQQQ down-trend; Rise into earnings?
The GMI and the GMI-R are at 2. Thursday was the first day in a new QQQQ short term down-trend. And yet the Worden T2108 indicator rose from 36% to 39%. And the percentage of the Nasdaq 100 stocks that closed above their 30 day averages rose from 30% to 32%. While there were 394 new lows in my universe of 4,000 stocks, there were also 68 new highs. With all of the bearishness and talk of recession by the pundits, maybe we will get an earnings release bounce later in January. This is not the time for me to go short, and I am instead nibbling at a few stocks that appear to be gaining support. I place a close sell stop as soon as I take a position. The key to success is to take many small losses and a few large profits.
GMI: 2+; GMI-R: 2+; Mainly in cash
The market weakened considerably on Wednesday. The GMI and GMI-R are both 2+. The GMI-R has 10 indicators, compared to the GMI which has 6. These additional indicators are more sensitive to short term trends and they are now all negative. I am mainly in cash.