The GMI remains at 6 and the GMI-R at 10. In spite these strong readings, it is disconcerting to me that the number of stocks in my universe of 4,000 that are hitting new lows is climbing. On Thursday, there were 157 new highs and 153 new lows. It is strange to see the steady climb in new lows. Many of these lows are regional banks that are in the midst of large declines. As Judy said to me, this may be the reason the Fed reduced rates. They may have foreseen the bank carnage. Speaking of Judy, her stock pick, COMV, that I wrote about on October 10, at 35.01, moved up again on Thursday, to 38.46.
GMI: 6; GMI-R: 10; but a lot of new lows, especially among apparel stocks
The GMI returned to 6 and the GMI-R to 10, both are maximum readings. The rise in these indexes was caused by an increase in new highs on Wednesday, to 178 out of the 4,000 stocks in my universe. I am somewhat concerned, however, by the rise in new lows to 131, the highest number since the August market decline. I examined the new lows and found that the industry with the most new lows (10) was apparel stores. Stocks like JWN, GYMB, DSW, PSS, CHS and FL all hit new lows and appear to be in steady down-trends. These stocks may be forecasting some type of decline in consumer spending. I am looking forward to option expiration on Friday.
GMI: 5; GMI-R: 8; QQQQ remains strong
The GMI fell one to 5, as there were only 97 new highs on Tuesday in my universe of 4,000 stocks. The GMI-R fell to 8, losing an additional point because there were more new lows than highs (98 vs. 97). The GMI-S has weakened to 63% because of short term weakness in the DIA, SPY and IJR. All of the short term indicators for the QQQQ remain positive.