The GMI fell back to 3+ and the GMI-R to 5+. Rarely have I seen such volatility. Time to be defensive, and not take big chances. The IBD Growth Mutual Fund Index is now back below its 50 day average. This means that the professionals who manage growth funds are not doing well. The QQQQ is also back below its 10 week average. I cannot consistently make money on the long side when these indicators are weak.
GMI: 6; GMI-R: 10; Impact of Fed?
The GMI and GMI-R are now at their maximum values. Monday was the second day of the new QQQQ up-trend. The Worden T2108 indicator is now at 55%. It will be interesting to see how the Fed’s actions affect the trend.
GMI: 5; GMI-R: 9; New QQQQ short term up-trend
The GMI is now 5 (of 6), for the first time since November 7 and the GMI-R is now 9. (Click on table to enlarge.) Friday was the first day in the new QQQQ short term up-trend (U-1). 
There were 144 new highs and 47 new lows in my universe of 4,000 stocks on Friday. 52% of the Nasdaq 100 stocks are back above their 30 day averages.
A trend follower never hits the top or bottom, but identifies the change in trend after it has occurred. So, it has taken this much time since the low on November 12 for the QQQQ to turn positive. The November bottom looks technically very similar to the bottom last August. That bottom was followed by a 50 day up-trend. Time will tell if this new up-trend will last as long. It is important to be cautious and to wade into long positions, for the trend can end abruptly at anytime. The odds have just shifted for me, however, toward the long side.
The psychology of trend changes is interesting. When a new up-trend occurs, everyone is skeptical and the news is negative. As the trend continues more people jump on board and there is a time when most everyone agrees that the trend is up and they stress the positives. Confidence in the up-trend grows until the top occurs and the psychology goes into reverse.
I have written a few covered calls on growth stocks, bought some QLD, and taken small positions in a few stocks. I am still largely in cash, however.
